Question

Cash Receipts Budget and Accounts Receivable Aging Schedule Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 Quarter 2 Quarter 3 Quarter 4 $4,600,000 5,100,000 5,000,000 7,600,000 In Shalimar's experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $4,900,000 and for the fourth quarter of the current year are $6,850,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year 4, current year 1, next year 2, next year 3, next year 4, next year

Answer 1

Solution 1:

Quarter Cash Sales Credit Sales 3, Current year $490,000 $4,410,000 |4, Current year. $685,000 $6,165,000 1, next year $460,000 $4,140,000 2, next year $510,000 $4,590,000 3, next year $500,000 $4,500,000 4, next year $760,000 $6,840,000 t24 (2) Sheet383 (3) Sheet647 Sheet6 (5) Sheet654

Solution 2 and 3:

м YL ai Solution 2 Shalimar Company cash receipts budget For the coming Year 7 Quarter 1 Quarter 2 Quarter 3 Quarter 4 8 Cash Sales | $460,000 $510,000 $500,000 $760,000 Received on account from: (65%,25%,7%) 10 Quarter 3, Current year $308,700 11 Quarter 4, Current year $1,541,250 $431,550 Quarter 1, next year $2,691,000 $1,035,000 $289,800 13 Quarter 2, next year $2,983,500 $1,147,500 $321,300 14 Quarter 3, next year $2,925,000 | $1,125,000 15 Quarter 4, next year $4,446,000 16 17 Total Cash Receipts $5,000,950 $4,960,050 $4,862,300 $6,652,300 18 19 20 Solution 3 Shalimar Company cash receipts budget For the coming Year 24 Quarter 1 Quarter 2 Quarter 3 Quarter 4 25 Cash Sales $460,000 $510,000 $500,000 $760,000 26 Received on account from: (65%,25%) 27 Quarter 4, Current year $1,541,250 28 Quarter 1, next year $2,691,000 $1,035,000 29 Quarter 2, next year $2,983,500 $1,147,500 30 Quarter 3, next year $2,925,000 $1,125,000 31 Quarter 4, next year $4,446,000 32 Total Cash Receipts I $4,692,250 $4,528,500 $4,572,500 $6,331,000 34 35 36 37 21 23 44 45 46 47 t24 (2) Sheet383 (3) ) Sheet647 Sheet6 (5) Sheet654