The management team of Benson Modems, Inc. (BMI) wants to investigate the effect of several different growth rates on sales and cash receipts. Cash sales for the month of January are expected to be $40,000. Credit sales for January are expected to be $200,000. BMI collects 100 percent of credit sales in the month following the month of sale. Assume a beginning balance in accounts receivable of $192,000.

Required

Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 2 percent and 4 percent. The results at a growth rate of 1 percent are shown as an example.

Sales Budget
	Jan				Feb				Mar
Cash sales	$	40,000			$	40,400			$	40,804
Sales on account		200,000				202,000				204,020
Total budgeted sales	$	240,000			$	242,400			$	244,824
Schedule of Cash Receipts
Current cash sales	$	40,000			$	40,400			$	40,804
Plus collections from accts. rec.		192,000				200,000				202,000
Total budgeted collections	$	232,000			$	240,400			$	242,804

Use the following forms, assuming a growth rate of 2 percent and 4 percent:

Complete this question by entering your answers in the tabs below.

2 percent

4 percent

Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 2 percent.

Sales Budget
		Growth rate of 2%
	Jan	Feb	Mar
Cash sales	$40,000
Sales on account	200,000
Total budgeted sales	$240,000
Schedule of Cash Receipts
Current cash sales	$40,000
Plus collections from accts. rec.	192,000
Total budgeted collections	$232,000

2 percent

4 percent

Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 4 percent.

Sales Budget
		Growth rate of 4%
	Jan	Feb	Mar
Cash sales	$40,000
Sales on account	200,000
Total budgeted sales	$240,000
Schedule of Cash Receipts
Current cash sales	$40,000
Plus collections from accts. rec.	192,000
Total budgeted collections	$232,000