Question

Monachino Corporation has found that 70% of its sales in any given month are credit sales, while the remainder are cash sales. Of the credit sales, Monachino Corporation has experienced the following collection pattern: November sales for last year were $100,000, while December sales were $115,000. Projected sales for the next three months are as follows: 25% received in the month of the sale 50% received in the month after the sale 18% received two months after the sale 7% of the credit sales are never received January.sales.. $ 155,000 February sales .... ... $ 120,000 March sales ........ $ 185,000 Requirement Prepare a cash collections budget for the first quarter, with a column for each month and for the quarter. (Round your answers to the nearest whole dollar.) Monachino Corporation Cash Collections Budget For the Months of January through March January | 46500 Cash sales Collections on credit sales: 25% Month of sale 50% Month after 18% Two months after 46500 Total cash collections

The months of January, February, March

Answer 1

Solution

Monachino Corportion
Cash collection budget
For the Month of January through March
	January	February	March
Cash Sales	$ 46,500	$ 36,000	$ 55,500
Collection on credit sales:
25% on Month of sale	$ 27,125	$ 21,000	$ 32,375
50% Month after	$ 40,250	$ 54,250	$ 42,000
18% Two Months after	$ 12,600	$ 14,490	$ 19,530
Total cash collection	$ 126,475	$ 125,740	$ 149,405

Working

	November	December	January	February	March
Totals sales	$ 100,000	$ 115,000	$ 155,000	$ 120,000	$ 185,000
Cash sales (Total sales x 30%)	$ 30,000	$ 34,500	$ 46,500	$ 36,000	$ 55,500
Credit sales (total sales - Cash sales)	$ 70,000	$ 80,500	$ 108,500	$ 84,000	$ 129,500