Question
Derrick Ltd. has the following budgeted sales for the upcoming four months plus last month: Month Total Budgeted Sales November $590,000 December $656,000 January $595,000
Derrick Ltd. has the following budgeted sales for the upcoming four months plus last month:
| Month | Total Budgeted Sales |
| November | $590,000 |
| December | $656,000 |
| January | $595,000 |
| February | $557,000 |
| March | $569,000 |
| April | $581,000 |
The company has found that 60% of their sales are cash sales and the remainder is on credit.
The company has the following history of accounts receivable collection:
| Percent paid in the month of sale | 30% |
| Percent paid in the month after sale | 65% |
| Percent paid in the second month after sale | 4% |
| Percent lost to uncollective accounts | 1% |
Prepare a schedule of cash receipts for January through April and answer the following questions.
What is the total cash receipts for January?
(HINT: Cornerstone 9.11 in the textbook as well as the Cash Receipts lecture video will help you determine this!)
What is the total cash receipts for February?
What is the total cash receipts for March?
What is the total cash receipts for April?
Step by Step Solution
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Step: 1
For January Total Budgeted Sales for January 595000 60 of sales are cash sales 595000 060 357000 Rem...
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Managerial Accounting
Authors: Karen W. Braun, Wendy M. Tietz
4th edition
978-0133428469, 013342846X, 133428370, 978-0133428377
