Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cash Receipts The sales budget for Perrier Inc. is forecasted as follows: Month Sales Revenue May $140,000 June 140,000 July 180,000 August 120,000 To prepare

Cash Receipts The sales budget for Perrier Inc. is forecasted as follows:

Month Sales Revenue
May $140,000
June 140,000
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:

60 percent in the month of sale.

20 percent in the month following sale.

15 percent in the second month following sale.

5 percent uncollectible.

The company gives a 1 percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $25,000, of which $6,000 represents uncollected March sales and $19,000 represents uncollected April sales. Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a three-month summary of estimated cash collections.

Perrier, Inc. Schedule of Budgeted Cash Collections Quarterly by Months
May June July Total
Total Cash receipts: $Answer $Answer $Answer $Answer

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

Electronic Health Records An Audit And Internal Control Guide

Authors: Rebecca S. Busch

1st Edition

0470258209, 978-0470258200

More Books

Students also viewed these Accounting questions

Question

3. Is it a topic that your audience will find worthwhile?

Answered: 1 week ago

Question

2. Does the topic meet the criteria specified in the assignment?

Answered: 1 week ago