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$4,700,000Quarter 25,240,000Quarter 36,770,000Quarter 47,780,000

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 $5,150,000 and for the fourth quarter of the current year are $7,040,000.

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.

QuarterCash SalesCredit Sales3, current year$fill in the blank 3c3733034fa8022_1

$fill in the blank 3c3733034fa8022_2

4, current yearfill in the blank 3c3733034fa8022_3

fill in the blank 3c3733034fa8022_4

1, next yearfill in the blank 3c3733034fa8022_5

fill in the blank 3c3733034fa8022_6

2, next yearfill in the blank 3c3733034fa8022_7

fill in the blank 3c3733034fa8022_8

3, next yearfill in the blank 3c3733034fa8022_9

fill in the blank 3c3733034fa8022_10

4, next yearfill in the blank 3c3733034fa8022_11

fill in the blank 3c3733034fa8022_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".

Shalimar CompanyCash Receipts BudgetFor the Coming YearQuarter 1Quarter 2Quarter 3Quarter 4Cash sales$

fill in the blank c4aa2a090021fc3_1

$

fill in the blank c4aa2a090021fc3_2

$

fill in the blank c4aa2a090021fc3_3

$

fill in the blank c4aa2a090021fc3_4

Received on account from:Quarter 3, current yearfill in the blank c4aa2a090021fc3_5

Quarter 4, current yearfill in the blank c4aa2a090021fc3_6

fill in the blank c4aa2a090021fc3_7

Quarter 1, next yearfill in the blank c4aa2a090021fc3_8

fill in the blank c4aa2a090021fc3_9

fill in the blank c4aa2a090021fc3_10

Quarter 2, next yearfill in the blank c4aa2a090021fc3_11

fill in the blank c4aa2a090021fc3_12

fill in the blank c4aa2a090021fc3_13

Quarter 3, next yearfill in the blank c4aa2a090021fc3_14

fill in the blank c4aa2a090021fc3_15

Quarter 4, next yearfill in the blank c4aa2a090021fc3_16

fill in the blank c4aa2a090021fc3_17

fill in the blank c4aa2a090021fc3_18

fill in the blank c4aa2a090021fc3_19

Total cash receipts$

fill in the blank c4aa2a090021fc3_20

$

fill in the blank c4aa2a090021fc3_21

$

fill in the blank c4aa2a090021fc3_22

$

fill in the blank c4aa2a090021fc3_23

3.What ifthe 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 CompanyCash Receipts BudgetFor the Coming YearQuarter 1Quarter 2Quarter 3Quarter 4Cash sales$

fill in the blank 46060bfd405d034_1

$

fill in the blank 46060bfd405d034_2

$

fill in the blank 46060bfd405d034_3

$

fill in the blank 46060bfd405d034_4

Received on account from:Quarter 4, current yearfill in the blank 46060bfd405d034_5

Quarter 1, next yearfill in the blank 46060bfd405d034_6

fill in the blank 46060bfd405d034_7

Quarter 2, next yearfill in the blank 46060bfd405d034_8

fill in the blank 46060bfd405d034_9

Quarter 3, next yearfill in the blank 46060bfd405d034_10

fill in the blank 46060bfd405d034_11

Quarter 4, next yearfill in the blank 46060bfd405d034_12

Total cash receipts$

fill in the blank 46060bfd405d034_13

$

fill in the blank 46060bfd405d034_14

$

fill in the blank 46060bfd405d034_15

$

fill in the blank 46060bfd405d034_16