The sales budget for Perrier Inc. is forecasted as follows: Cash Receipts

The sales budget for Perrier Inc. is forecasted as follows:

$60$ percent in the month of sale.

$20$ percent in the month following sale.

$15$ percent in the second month following sale.

$5$ percent uncollectible.

Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a three$-$month summary of estimated cash collections.

Month Sales Revenue

May $$140,000$

June $140,000$

July $180,000$

August $120,000$

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:

$60$ percent in the month of sale.

$20$ percent in the month following sale.

$15$ percent in the second month following sale.

$5$ percent uncollectible.

The company gives a $1$ percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April $30$ is $$25,000,$ of which $$6,000$ represents uncollected March sales and $$19,000$ represents uncollected April sales. $($Hint: For collections of March and April receivables, start by determining total sales for the month. Assume the normal sales pattern.$)$

Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a three$-$month summary of estimated cash collections.

Perrier, Inc.

Schedule of Budgeted Cash Collections

Quarterly by Months

May June July Total

Total Cash receipts: Answer $1$

$0$

Answer $2$

$0$

Answer $3$

$0$

Answer $4$

$0$