Question
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.
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