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Q15SE

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Horngren'S Financial And Managerial Accounting
Found in: Page 1231

Short Answer

Preparing a financial budget—schedule of cash receipts

Victors expects total sales of $702,000 for January and $349,000 for February. Assume that Victor's sales are collected as follows:

50% in the month of the sale

30% in the month after the sale

16% two months after the sale

4% never collected

November sales totaled $388,000, and December sales were $407,000. Prepare a schedule of cash receipts from customers for January and February. Round answers to the nearest dollar.

Answer

Total cash receipts from the customers is $535,180 in the month of January and $450,220 in the month of February.

See the step by step solution

Step by Step Solution

Step 1: Meaning of schedule of cash receipts

The structure and table formed for measuring the cash balances in the form of gained.

Step 2: Preparation of schedule of cash receipts

Particulars

January

February

Total budgeted sales

$702,000

$349,000

Cash receipts from customers:

50 % in the month of sale

$351,000

$174,500

30% in the month after sale

$407,000*30% =$122,100

$702,000*30% =$210,600

16% two months after sales

$388,000*16% =$62,080

$407,000*16% =$65,120

Total cash receipts from customers

$535,180

$450,220

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