Question

E8-11 Calculating Cash Receipts [LO 8-4]

Shadee Corp. expects to sell 620 sun visors in May and 330 in June. Each visor sells for $13. Shadee’s beginning and ending finished goods inventories for May are 70 and 40 units, respectively. Ending finished goods inventory for June will be 65 units.

It expects the following unit sales for the third quarter:      

July	530
August	450
September	450

Sixty percent of Shadee’s sales are cash. Of the credit sales, 52 percent is collected in the month of the sale, 37 percent is collected during the following month, and 11 percent is never collected.

Required:

Calculate Shadee’s total cash receipts for August and September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

Answer 1

	August	September
Cash sales	3510	3510
Credit sales:
July	1020
August	1217	866
September		1217
Total cash receipts	5747	5593