Question
Guitar Supplies Company has the following sales budget for the first three months of the current year: Month Sales Revenue January $300,000 February 75,000 March
Guitar Supplies Company has the following sales budget for the first three months of the current year:
| Month | Sales Revenue |
| January | $300,000 |
| February | 75,000 |
| March | 220,000 |
Historically, the following trend has been established regarding cash collection of sales:
- 65 percent in month of sale
- 25 percent in month following sale
- 8 percent in second month following sale
- 2 percent uncollectible
The company allows a 2 percent cash discount for payments made by customers during the month of the sale. November and December sales were $50,000 and $100,000, respectively.
Required: Prepare a schedule of budgeted cash collections from sales for January, February, and March. Also, calculate the Acc Receivables as of 31st March net of the uncollectible sales.
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Intermediate Accounting principles and analysis
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
2nd Edition
471737933, 978-0471737933
