Question

Laura's Decor Stores made the following sales projection for the next six months. All sales are credit sales.

march 38,000

April 44,000

may 33,000

june 42,000

july 50,000

august 52,000

sales in january and february were $41,000 and $40,000 respectively

experience has shown that total sales, 10% are uncollectible, 35% are collected in the month of sale, 45 percent are collected in the following month and 10 percent are collected two months after sale.

a) prepare a monthly cash receipts schedule for rhe firm for march through August.

Cash Receipts Schedule March April January February May June July August Credit sales In month of sale One month after sale Two months after sale Total cash receipts $ 0 0 0 0 0 0

Answer 1

Solution:

Credit sales	January	Februray	Mar	April	May	June	July	August
In the month of sales			13,300	15,400	11,550	14,700	17,500	18,200
One month after use			18,000	17,100	19,800	14,850	18,900	22,500
Two months after use			4,100	4,000	3,800	4,400	3,300	4,200
Total cash receipts			35,400	36,500	35,150	33,950	39,700	44,900

　

Working:

Credit sales	January	February	Mar	April	May	June	July	August
In the month of sales			38000*35%	44000*35%	33000*35%	42000*35%	50000*35%	52000*35%
One month after use			40000*45%	38000*45%	44000*45%	33000*45%	42000*45%	50000*45%
Two months after use			41000*10%	40000*10%	38000*10%	44000*10%	33000*10%	42000*10%