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Boutique Ltd is a retailer of ladies fashion and has the following historical collection pattern for its credit sales: 70 per cent collected in

Boutique Ltd is a retailer of ladies’ fashion and has the following historical collection pattern for its credit sales: 

 70 per cent collected in the month of sale 

 15 per cent collected in the first month after sale 

 10 per cent collected in the second month after sale 

 4 per cent collected in the third month after sale 

 1 per cent uncollectable. 

The credit sales have been budgeted for the last seven months of the year, as shown below:

June $245 000

July 300 000

August 350 000

September 400 000

October 450 000

November 500 000

December 425 000


Required:

Build an Excel spreadsheet to solve the following requirements.

1. Calculate the estimated total cash receipts during October from credit sales.

2. Calculate the estimated total cash receipts during the December quarter from credit sales during that quarter.

3. Use your spreadsheet to demonstrate how your answers for requirements 1 and 2 will change if June and July sales are $350 000 and $425 000, respectively.

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