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27) Duffy Corporation has prepared the following sales budget: MonthCash SalesCredit Sales May$16,000$68,000 June20,00080,000 July18,00074,000 August24,00092,000...

27) Duffy Corporation has prepared the following sales budget:

MonthCash SalesCredit Sales

May$16,000$68,000

June20,00080,000

July18,00074,000

August24,00092,000

September22,00076,000

Collections are 40% in the month of sale, 45% in the month following the sale, and 10% two months following the sale. The remaining 5% is expected to be uncollectible.

Required:

Prepare a schedule of cash collections for July through September.

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Answer #1

STATEMENT SHOWING CASH COLLECTIONS FOR JULY - SEPTEMBER

Particulars

July

$

August

$

September

$
cash inflow from
Cash sales 18000 24000 22000
credit sales of current month (40%) 29600 36800 30400
collection from credit sales of previous month (45%) 36000 33300 41400
collection from two months prior credit sales 6800 8000 7400
total cash collection 90400 102100 101200
1 1
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