E 29

Cash Receipts The sales budget for Perrier Inc, is forecasted as follows: To prepare a cash budget, the company must determine the cash collections from sales , the following trend has been established regarding cash 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 percentage cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $7,000 represents uncollected March sales and $17,000 represents uncollected April sales. Required Prepare a schedule of budgeted cash collections from May, June, and July. Include a three- month summary of estimated cash collections