Question

Schedule of Cash Collections on Accounts Receivable and Cash Budget Bennett Inc. found that about 30% of its sales during the month were for cash. Bennett has the following accounts receivable payment experience: Percent paid in the month of sale 25 Percent paid in the month after the sale Percent paid in the second month after the sale Bennett's anticipated sales for the next few months are as follows: April $250,000 May 290,000 June 280,000 July 295,000 300,000 August Required: 1. Calculate credit sales for May. 5203,000 Calculate credit sales for June $196,000 Calculate credit sales for July

Answer 1

Schedule of cash receipts

For July and August

	July	August
Cash sales	88,500	90,000
Payment on account:
From May credit sales:
203,000 x 5%	10,150
From June credit sales:
196,000 x 68%	133,280
196,000 x 5%		9,800
From July credit sales:
206,500 x 25%	51,625
206,500 x 68%		140,420
From August credit sales:
210,000 x 25%		52,500
Cash receipts	$283,555	$292,720

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