Question

Please answer the following. Thanks.

Grippers expects total sales of $701,500 for January and $355,000 for February November is totale $393,000 and December sales were $409,000 The following schedule of cash receipts for January and February was prepared based upon the collection history given (Click the icon to view the collection history) Click the icon to view the schedule of cash receipts.) Now assume that Gripper's sales are collected as follows: 30% in the month of the sale 20% in the month her the sale 45% two months after the sale 4 never collected Prepare a revised schedule of cash receipts for January and February (If a box is not used in the table lave pe box empty, do not enter azer.) Cash Receipts from Customers January February Total sales January February Cash Receipts from Customers: Noy Credit sales, collection of Nov. Sales in Jan Credit sales collection of Dec. sales in Jan Deo Enter any number in the edit fields and then continue to the next question

Answer 1

Cash receipts budget are prepared as a part of cash budget. It helps in determining how much cash will company collect during each month.Past data are used to prepare cash collection budget.

(1) 40% in month of sale

30% in month after sale

27% two month after sale

3% never collected

	January	February
Total Sales	$701,500	$355,000
Cash receipts from customers
Nov sales col. in January	$106,110[$393,000*27%]
Dec sale col. in January	$122,700[$409,000*30%]
Dec sale col. in February		$110,430[$409,000*27%]
Jan sale col. in Jan	$280,600[$701,500*40%]
Jan Sales col. in Feb		$210,450[$701,500*30%]
Feb sales col. in Feb		$142,000[$355,000*40%]
Total	$509,410	$462,880

(2) Revised

30% in month of sale, 20% in month after sale,46% two month after sale,4% never collected.

	January	February
Total Sales	$701,500	$355,000
Cash receipts from customers
Nov sales col. in January	$180,780[$393,000*46%]
Dec sale col. in January	$81,800[$409,000*20%]
Dec sale col. in February		$188,140[$409,000*46%]
Jan sale col. in Jan	$210,450[$701,500*30%]
Jan Sales col. in Feb		$140,300[$701,500*20%]
Feb sales col. in Feb		$106,500[$355,000*30%]
Total	$473,030	$434,940