Question

Fielding Corporation has found that 80% of its sales in any given month are credit sales, while the remainder are cash sales. Of the credit sales, Fielding Corporation has experienced the following collection pattern: 25% received in the month of the we November sales for last year were $85,000, while December sales were $115.000. Projected sales for the next three months are as follows: January sales.................$ 180,000 February sales....... ..$ 120,000 Marche s.................$ 105,000 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) 50% received in the months after the sale 16% received two months after the sale 9% of the credit sales are never received

Answer 1

Ans:

Fielding Corporation
Cash collection budget
For the month of January through march
	January	February	March	Quarter
Cash sales	$        72,000.00	$        48,000.00	$        74,000.00	$    194,000.00
Collection on credit sales
25% Month of sale	$        27,000.00	$        18,000.00	$        27,750.00	$      72,750.00
50% Month after	$        34,500.00	$        54,000.00	$        36,000.00	$    124,500.00
16% Two months after	$          8,160.00	$        11,040.00	$        17,280.00	$      36,480.00
Total Cash collections	$     141,660.00	$     131,040.00	$     155030.00	$    427,730.00

Working

	November	December	January	February	March
Sales	$        85,000.00	$     115,000.00	$     180,000.00	$    120,000.00	$     185,000.00
Cash sales	$        34,000.00	$        46,000.00	$        72,000.00	$      48,000.00	$       74,000.00
Credit sales	$        51,000.00	$        69,000.00	$     108,000.00	$      72,000.00	$     111,000.00