Question

Serdnic Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $894,000 in October, $950,000 in November, $1,060,000 in December, and $920,000 in January. Serdnic's sales are 30% cash and 70% credit. The company's collection history indicates that credit sales are collected as follows: 25% in the month of the sale 60% in the month after the sale 14% two months after the sale 1% are never collected Requirements 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales. 2. Prepare a cash collection budget for December and January. Round all answers up to the nearest dollar. Requirement 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales. Serdnic Reeds Sales Budget For the Four Months Ended January October November December January Cash sales Credit sales Total sales Enter any number in the edit fields and then click Check Answer. 1 pemaining - part remaining Clear All Check Answer

Answer 1

Serdnic Reeds Sales Budget Workings For the Four Months Ended January October December November November October December January 276,000 ($ 894,000* 30 % ) | ( $ 950,000* 30 % ) ($1,060,000* 30 % )| ( $ 920,000 30%) 644,000 ($ 894,000 70 % ) | ( $ 950,000 70 % ) ($1,060,000 70% ) ($ 920,000* 70%) January $ 285,000 $ $ 625,800 $ 665,000 $ 318,000 $ 742,000 $ 894,000 950,000 1,060,000 $ Cash sales $268,200 Credit sales Total sales 920,000 Serdnic Reeds Cash Collections Budget For January and December Workings Credit sales December $625,800$ $ 665,000 $ 399,000 $ $ 742,000 $ 185,500 $ $ 644,000 $ December January January October sales ($ 625,000 14%) 93,100 ($665,000 60 % ) | ( $ 665,000 14 % ) 445,200 ($742,000 25% ) ($ 742,000 60 %) 87,612 November sales December sales ($644,000 25%) January sales 161,000 S 672,112 699,300