Question
Cash Receipts Budget and Accounts Receivable Aging Schedule Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter
Cash Receipts Budget and Accounts Receivable Aging Schedule
Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales:
| Quarter 1 | $4,630,000 |
| Quarter 2 | 5,740,000 |
| Quarter 3 | 4,630,000 |
| Quarter 4 | 8,210,000 |
In Shalimar's experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,300,000 and for the fourth quarter of the current year are $7,050,000.
Required:
1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year.
| Quarter | Cash Sales | Credit Sales |
| 3, current year | $fill in the blank 397b6d006fc5fb4_1 | $fill in the blank 397b6d006fc5fb4_2 |
| 4, current year | fill in the blank 397b6d006fc5fb4_3 | fill in the blank 397b6d006fc5fb4_4 |
| 1, next year | fill in the blank 397b6d006fc5fb4_5 | fill in the blank 397b6d006fc5fb4_6 |
| 2, next year | fill in the blank 397b6d006fc5fb4_7 | fill in the blank 397b6d006fc5fb4_8 |
| 3, next year | fill in the blank 397b6d006fc5fb4_9 | fill in the blank 397b6d006fc5fb4_10 |
| 4, next year | fill in the blank 397b6d006fc5fb4_11 | fill in the blank 397b6d006fc5fb4_12 |
2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. If an amount is zero, enter "0".
| Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | |
|---|---|---|---|---|
| Cash sales | $fill in the blank 4abab9fc2f82ffc_1 | $fill in the blank 4abab9fc2f82ffc_2 | $fill in the blank 4abab9fc2f82ffc_3 | $fill in the blank 4abab9fc2f82ffc_4 |
| Received on account from: | ||||
| Quarter 3, current year | fill in the blank 4abab9fc2f82ffc_5 | |||
| Quarter 4, current year | fill in the blank 4abab9fc2f82ffc_6 | fill in the blank 4abab9fc2f82ffc_7 | ||
| Quarter 1, next year | fill in the blank 4abab9fc2f82ffc_8 | fill in the blank 4abab9fc2f82ffc_9 | fill in the blank 4abab9fc2f82ffc_10 | |
| Quarter 2, next year | fill in the blank 4abab9fc2f82ffc_11 | fill in the blank 4abab9fc2f82ffc_12 | fill in the blank 4abab9fc2f82ffc_13 | |
| Quarter 3, next year | fill in the blank 4abab9fc2f82ffc_14 | fill in the blank 4abab9fc2f82ffc_15 | ||
| Quarter 4, next year | fill in the blank 4abab9fc2f82ffc_16 | fill in the blank 4abab9fc2f82ffc_17 | fill in the blank 4abab9fc2f82ffc_18 | fill in the blank 4abab9fc2f82ffc_19 |
| Total cash receipts | $fill in the blank 4abab9fc2f82ffc_20 | $fill in the blank 4abab9fc2f82ffc_21 | $fill in the blank 4abab9fc2f82ffc_22 | $fill in the blank 4abab9fc2f82ffc_23 |
3. What if the recession led Shalimar's top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.
| Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | |
|---|---|---|---|---|
| Cash sales | $fill in the blank fed934fd3fd1009_1 | $fill in the blank fed934fd3fd1009_2 | $fill in the blank fed934fd3fd1009_3 | $fill in the blank fed934fd3fd1009_4 |
| Received on account from: | ||||
| Quarter 4, current year | fill in the blank fed934fd3fd1009_5 | |||
| Quarter 1, next year | fill in the blank fed934fd3fd1009_6 | fill in the blank fed934fd3fd1009_7 | ||
| Quarter 2, next year | fill in the blank fed934fd3fd1009_8 | fill in the blank fed934fd3fd1009_9 | ||
| Quarter 3, next year | fill in the blank fed934fd3fd1009_10 | fill in the blank fed934fd3fd1009_11 | ||
| Quarter 4, next year | fill in the blank fed934fd3fd1009_12 | |||
| Total cash receipts | $fill in the blank fed934fd3fd1009_13 | $fill in the blank fed934fd3fd1009_14 | $fill in the blank fed934fd3fd1009_15 | $fill in the blank fed934fd3fd1009_16 |
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Managerial Accounting Tools for business decision making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
6th Edition
978-0470477144, 1118096894, 9781118214657, 470477148, 111821465X, 978-1118096895
