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Cash Receipts Budget and Accounts Receivable Aging Schedule Shalimar Company manufactures and sells industrial products. For
2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the ca
3. What if the recession led Shalimars top management to assume that in the next year 10 percent of credit sales would never
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Answer #1

1.

Quarter Cash Sales Credit Sales
3, current year 495000 4455000
4, current year 774000 6966000
1, next year 474000 4266000
2, next year 560000 5040000
3, next year 373000 3357000
4, next year 822000 7398000

Working:

Quarter Cash Sales Credit Sales
3, current year =4950000*0.1 =4950000*0.9
4, current year =7740000*0.1 =7740000*0.9
1, next year =4740000*0.1 =4740000*0.9
2, next year =5600000*0.1 =5600000*0.9
3, next year =3730000*0.1 =3730000*0.9
4, next year =8220000*0.1 =8220000*0.9

2.

Shalimar Company
Cash Receipts Budget
For the Coming Year
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Cash sales 474000 560000 373000 822000
Received on account from:
Quarter 3, current year 311850
Quarter 4, current year 1741500 487620
Quarter 1, next year 2772900 1066500 298620
Quarter 2, next year 3276000 1260000 352800
Quarter 3, next year 2182050 839250
Quarter 4, next year 0 0 0 4808700
Total cash receipts 5300250 5390120 4113670 6822750

Working:

Quarter 1 Quarter 2 Quarter 3 Quarter 4
Cash sales 474000 560000 373000 822000
Received on account from:
Quarter 3, current year =4455000*0.07
Quarter 4, current year =6966000*0.25 =6966000*0.07
Quarter 1, next year =4266000*0.65 =4266000*0.25 =4266000*0.07
Quarter 2, next year =5040000*0.65 =5040000*0.25 =5040000*0.07
Quarter 3, next year =3357000*0.65 =3357000*0.25
Quarter 4, next year 0 0 0 =7398000*0.65

3.

Shalimar Company
Cash Receipts Budget
For the Coming Year
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Cash sales 474000 560000 373000 822000
Received on account from:
Quarter 4, current year 1741500
Quarter 1, next year 2772900 1066500
Quarter 2, next year 3276000 1260000
Quarter 3, next year 2182050 839250
Quarter 4, next year 4808700
Total cash receipts 4988400 4902500 3815050 6469950
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