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ABC Company’s budgeted sales for June, July, and August are 12,400, 16,400, and 14,400 units respectively....

ABC Company’s budgeted sales for June, July, and August are 12,400, 16,400, and 14,400 units respectively. The selling price for each unit is $15. Based on past experience, ABC expects that 30% of a month’s sales will be collected in the month of sale, 60% in the following month, and 8% in the second month following the sale. Required: Prepare an analysis of cash receipts from sales for ABC Company for August.

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Answer #1
Cash receipts in august
Collection from june sales [186000 x 8%] $      14,880.00
Collection from july sales [246000 x 60%] $ 1,47,600.00
Collection from August sales [216000 x 30%] $      64,800.00
Total Collection in August $ 2,27,280.00
June July August
Units to be sold 12400 16400 14400
Sale price $              15.00 $              15.00 $              15.00
Total Sales $ 1,86,000.00 $ 2,46,000.00 $ 2,16,000.00
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