Question

Provide formula, process in Excel

QUESTION 2

The LaGrange Corporation had the following budgeted sales for the first half of the current year:

		Cash Sales		Credit Sales
January	$	50,000	$	150,000
February	$	55,000	$	170,000
March	$	43,000	$	130,000
April	$	38,000	$	123,000
May	$	48,000	$	200,000
June	$	80,000	$	170,000

The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:

Collections on sales:

• 50% in month of sale
• 40% in month following sale
• 10% in second month following sale

The accounts receivable balance on January 1 of the current year was $65,000, of which $42,000 represents uncollected December sales and $23,000 represents uncollected November sales.

Required:

Prepare the total cash collection budget for January.

Answer 1

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Please find below the answer
Statement showing Computations
Particulars	Amount
Cash Sales - January	50,000.00
Collection of January Credit Sales = 150,000*50%	75,000.00
Collection of December Credit Sales = 42,000*40%/50%	33,600.00
Collection of November Credit Sales	23,000.00
total cash collection for January	181,600.00