A company has budgeted its sales for the next three months at 5,000; 6,000; and 4,500 units. It expects to sell its products for $12
A company has budgeted its sales for the next three months at 5,000; 6,000; and 4,500 units. It expects to sell its products for $12 per unit. Based on past experience, the company estimates that 40 percent of its customers will pay their bills in time to take the 2 percent discount offered. Another 30 percent of customers will pay their bills within the month they are billed, but after the discount period has expired. Finally, the company expects that 30 percent of its customers will pay their bills in the month after they are billed. The company bills its customers on the first day of the month after the sale. Actual sales for past two months were $64,800 and $66,000, respectively. Therefore, the beginning balance of accounts receivable is $85,440 ($64,800 * .3 + $66,000). Determine the sales budget, cash receipts schedule, and accounts receivable schedule for the next three months.
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