Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

From this practice problem, what is the total budgeted cash receipts for February ? For the purpose of a cash receipts budget, we are not

From this practice problem, what is the total budgeted cash receipts for February?

image text in transcribedimage text in transcribed

For the purpose of a cash receipts budget, we are not primarily thinking terms of sales in a month, but we see the amount of cash received in a month comes from multiple months. That cash received will come from sales in various months. As an example, let's assume sales are as follows: January 90,000 February 100,000 March 110,000 April 120,000 130,000 May Let's further assume as we look to project cash receipts for May that cash sales are 10% of total sales for each month. And we expect the following aging pattern to remain constant for credit sales Invoices Paid Within 30 day 75% Invoices Paid Between 31 and 60 days 15% Invoices Paid Between 61 and 90 days 79% Invoices Paid Between 91 and 120 days 39%

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

More Books

Students also viewed these Accounting questions