So our total budgeted cash receipts for May are $117,580. Please note that is this problem, we have five sources of cash receipts in May. Or another way to say it, sales from 5 different months are paid for in May. Also please note that the number of sources (months) you have in a problem will be based on the AR aging historical schedule given to you in the problem.

We need to do this for each month in the year to forecast if we will have enough cash on hand to cover our cash disbursements. When we combine the cash receipts budget with the cash disbursements budget, we then cash see predicted cash shortages. When we see a predicted cash shortage, it is our job. It is our job to locate additional funds to cover the cash shortage.

Acme Industries Cash Recipts Budget \begin{tabular}{|r|r|r|r|r|} \hline 2006 Sales & & & Nov 2006 & Dec 2006 \\ \hline & & & 215,000 & 225,000 \\ \hline 2007 Sales & 112,500 & 337,500 & 450,000 & 225,000 \\ \hline 10% Cash Sales & & & & \\ \hline 90% Credit Sales & & & & \\ \hline \end{tabular} Credit Sales Collections 75\% in Next Month after sale 24% in 2 nd Month after sale 2007 Cash Collections Budget Current Cash Sales 1 Month Prior 2 Months Prior Total Cash Receipts