FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Budgeting Cash
Whitney's, Inc., sells on terms of 5% discount for "cash and carry" or 2/10, n/30 and estimates its total sales for the second calendar quarter of next year as follows: April, $750,000 May, $600,000 and June, $900,000. An analysis of operations indicates
the following customer collection patterns:
In month of sale:
Portion
of
Total
Sales
Cash at time of sale
25%
On account, during discount period
1596
On account, after discount period
10%
In month following sale
On account, during discount period
20%
On account, after discount period
10%
In second month following sale:
On account, after discount period
15%
Average portion uncollectible
5%
100%
Prepare an estimate of the cash to be collected from customers during June.
Estimated Collections from Customers in June
April Sales
On account, no discount
May Sales
On account, no discount
0
On account, with discount
0
June sales
On account, no discount
On account, with discount
Cash
Total estimated June collections
0
0
0
$
0
Check
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Transcribed Image Text:Budgeting Cash Whitney's, Inc., sells on terms of 5% discount for "cash and carry" or 2/10, n/30 and estimates its total sales for the second calendar quarter of next year as follows: April, $750,000 May, $600,000 and June, $900,000. An analysis of operations indicates the following customer collection patterns: In month of sale: Portion of Total Sales Cash at time of sale 25% On account, during discount period 1596 On account, after discount period 10% In month following sale On account, during discount period 20% On account, after discount period 10% In second month following sale: On account, after discount period 15% Average portion uncollectible 5% 100% Prepare an estimate of the cash to be collected from customers during June. Estimated Collections from Customers in June April Sales On account, no discount May Sales On account, no discount 0 On account, with discount 0 June sales On account, no discount On account, with discount Cash Total estimated June collections 0 0 0 $ 0 Check
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