1. 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	$4,730,000
   Quarter 2	5,790,000
   Quarter 3	4,280,000
   Quarter 4	7,730,000

   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 $5,410,000 and for the fourth quarter of the current year are $7,730,000.

   Required:

   Question Content Area

   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 e75110066043fab_1	$fill in the blank e75110066043fab_2
   4, current year	fill in the blank e75110066043fab_3	fill in the blank e75110066043fab_4
   1, next year	fill in the blank e75110066043fab_5	fill in the blank e75110066043fab_6
   2, next year	fill in the blank e75110066043fab_7	fill in the blank e75110066043fab_8
   3, next year	fill in the blank e75110066043fab_9	fill in the blank e75110066043fab_10
   4, next year	fill in the blank e75110066043fab_11	fill in the blank e75110066043fab_12

   Question Content Area

   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".

   Shalimar Company Cash Receipts Budget For the Coming Year

   	Quarter 1	Quarter 2	Quarter 3	Quarter 4
   Cash sales	$fill in the blank 57633e019069f97_1	$fill in the blank 57633e019069f97_2	$fill in the blank 57633e019069f97_3	$fill in the blank 57633e019069f97_4
   Received on account from:
   Quarter 3, current year	fill in the blank 57633e019069f97_5
   Quarter 4, current year	fill in the blank 57633e019069f97_6	fill in the blank 57633e019069f97_7
   Quarter 1, next year	fill in the blank 57633e019069f97_8	fill in the blank 57633e019069f97_9	fill in the blank 57633e019069f97_10
   Quarter 2, next year		fill in the blank 57633e019069f97_11	fill in the blank 57633e019069f97_12	fill in the blank 57633e019069f97_13
   Quarter 3, next year			fill in the blank 57633e019069f97_14	fill in the blank 57633e019069f97_15
   Quarter 4, next year	fill in the blank 57633e019069f97_16	fill in the blank 57633e019069f97_17	fill in the blank 57633e019069f97_18	fill in the blank 57633e019069f97_19
   Total cash receipts	$fill in the blank 57633e019069f97_20	$fill in the blank 57633e019069f97_21	$fill in the blank 57633e019069f97_22	$fill in the blank 57633e019069f97_23

   Question Content Area

   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.

   Shalimar Company Cash Receipts Budget For the Coming Year

   	Quarter 1	Quarter 2	Quarter 3	Quarter 4
   Cash sales	$fill in the blank 56db04f66fb2061_1	$fill in the blank 56db04f66fb2061_2	$fill in the blank 56db04f66fb2061_3	$fill in the blank 56db04f66fb2061_4
   Received on account from:
   Quarter 4, current year	fill in the blank 56db04f66fb2061_5
   Quarter 1, next year	fill in the blank 56db04f66fb2061_6	fill in the blank 56db04f66fb2061_7
   Quarter 2, next year		fill in the blank 56db04f66fb2061_8	fill in the blank 56db04f66fb2061_9
   Quarter 3, next year			fill in the blank 56db04f66fb2061_10	fill in the blank 56db04f66fb2061_11
   Quarter 4, next year				fill in the blank 56db04f66fb2061_12
   Total cash receipts	$fill in the blank 56db04f66fb2061_13	$fill in the blank 56db04f66fb2061_14	$fill in the blank 56db04f66fb2061_15	$fill in the blank 56db04f66fb2061_16

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