Question

Emerald Service anticipates the following sales revenue over a five-month period: Click the icon to view the sales data.) The company's sales are 40% cash and 60% credit its collection history indicates that credit sales are collected as follows: (Click the icon to view the collections data) How much cash will be collected in January? In February? In March? For the quarter in total? Complete the cash budget to determine how much cash will be collected in January February March and for the quarter in total (Round your answers to the nearest whole dollar.) Emerald Service Cash Collections Budget For the Months of January through March January Cash sales Collection of credit sales: 25% Month of sale 50% Month after 15% Two months after Total cash collections

Answer 1

Cash collection budget for January, February and March: Particular February March January Quarter Cash sales @40% of total sales 6,240 4,800 5,760 16,800 Add: Collection form credit sales 25% month of sales 2,340 1,800 2,160 6,300 50% month after sale 3,240 4,680 3,600 11,520 972 15% two months after sale 1,512 1,404 3,888 Total cash collections 13,332 12,252 12,924 38,508