Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Calculate second-quarter cash collections from sales for a company that expects to have credit sales of $200,000 in quarter 1 and $300,000 in quarter 2,

Calculate second-quarter cash collections from sales for a company that expects to have credit sales of $200,000 in quarter 1 and $300,000 in quarter 2, and collects 75% in the quarter of sale and the remaining 25% in the following quarter. A schedule of expected cash collections, such as the one that appears in Schedule 1 for Patterson Framing, is prepared after the sales budget. This schedule will be needed later to prepare the cash budget. Cash collections consist of collections on sales made to customers in prior periods plus collections on sales made in the current budget period. At Patterson Framing, experience has shown that 60% of sales is collected in the quarter in which the sale is made and the remaining 40% is collected in the following quarter. So, for example, 60% of the first-quarter sales of $600,000 (or $360,000) is collected during the first quarter and 40% (or $240,000) is collected during the second quarter.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Horngrens Accounting

Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann Johnston, Peter R. Norwood

11th Canadian Edition Volume 2

0135359783, 978-0135359785

More Books

Students also viewed these Accounting questions

Question

Simplify. 3(2w+2)-8

Answered: 1 week ago

Question

3. Avoid making mistakes when reaching our goals

Answered: 1 week ago