Cash Receipts

The sales budget for Perrier Inc. is forecasted as follows: Month Sales Revenue

May $ $120,000$

June $160,000$

July $180,000$

August $120,000$ To prepare a cash budget, the company must determine the budgeted cash collections from sales. Historically, the following trend has been established regarding cash collection of sales:

$50$ percent in the month of sale.

$25$ percent in the month following sale.

$20$ percent in the second month following sale

$5$ percent uncollectible. The company gives a $2$ percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April $30$ is $$24,000,$ of which $$7,000$ represents uncollected March sales and $$17,000$ represents uncollected April sales. $($Hint: For collections of March and April receivables, start by determining total sales for the month. Assume the normal sales pattern.$)$

Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a three$-$month summary of estimated cash collections