Question
Alderman Corporation has found that 60% of its sales in any given month are credit sales, while the remainder are cash sales. Of the credit
Alderman Corporation has found that 60% of its sales in any given month are credit sales, while the remainder are cash sales. Of the credit sales, Alderman Corporation has experienced the following collection pattern:
25% received in the month of the sale |
50% received in the month after the sale |
20% received two months after the sale |
5% of the credit sales are never received |
November sales for last year were $105,000, while December sales were $110,000.
Projected sales for the next three months are as follows:
January sales. . . . . . . . . . . . . . . | $145,000 |
---|---|
February sales. . . . . . . . . . . . . . | $125,000 |
March sales. . . . . . . . . . . . . . . . | $190,000 |
Requirement
Prepare a cash collections budget for the first quarter, with a column for each month and for the quarter. (Round your answers to the nearest whole dollar.)
Alderman Corporation | ||
Cash Collections Budget | ||
For the Months of January through March |
January | |
Cash sales | ______ |
Collections on credit sales: | ______ |
25% Month of sale | ______ |
50% Month after | ______ |
20% Two months after | ______ |
Total cash collections | ______ |
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