Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hi could you Please Help me with this question I do not understand how to calculate the cahs for June considering 1% discounthe sales budget

Hi could you Please Help me with this question I do not understand how to calculate the cahs for June considering 1% discounthe sales budget for Andrew Inc. is forecasted as follows:

MonthSales RevenueMay$ 170,000June210,000July230,000August170,000

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:

  • 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 percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $34,000, of which $10,000 represents uncollected March sales and $24,000 represents uncollected April sales.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

Students also viewed these Accounting questions