Question

Leret ​Reeds, a manufacturer of​ saxophone, oboe, and clarinet​ reeds, has projected sales to be $ 904 comma 000 in​ October, $ 962 comma 000 in​ November, $ 1 comma 070 comma 000 in​ December, and $ 920 comma 000 in January. Leret​'s sales are 25​% cash and 75​% credit. The​ company's collection history indicates that credit sales are collected as​ follows:   20​% in the month of the sale   65​% in the month after the sale   10​% two months after the sale   5​% 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. October November December January Cash sales Credit sales Total sales Requirement 2. Prepare a cash collection budget for December and January. Round all answers up to the nearest dollar. Leret Reeds Budgeted Cash Collections from Customers For the Months of December and January December January Cash sales Collection of credit sales: 20% of current month credit sales 65% of prior month credit sales 10% of credit sales two months ago Total collection of credit sales Total cash collections Enter any number in the edit fields and then continue to the next question.

Answer 1

Answer to Requirement 1.

	October	November	December	January
Cash Sales	226,000	240,500	267,500	230,000
Credit Sales	678,000	721,500	802,500	690,000
Total Sales	904,000	962,000	1,070,000	920,000

Answer to Requirement 2.

Leret Reeds

Budgeted Cash Collection from Customers

for the months of December and January

	December	January
Cash Sales	267,500	230,000
Collection of Credit Sales:
20% of Current Months Credit Sales	160,500	138,000
65% of Prior months Credit Sales	468,975	521,625
10% of Two months prior Credit Sales	67,800	72,150
Total Collection from Credit Sales	697,275	731,775
Total Cash Collection	964,775	961,775