On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All company's sales are made on account. The following information has been provided by Spicer's management. Month January February March April May Credit Sales $ 300,000 (actual) 400,000 (actual) 634,000 (estimated) 876,000 (estimated) 800,000 (estimated) The company's collection activity on credit sales historically has been as follows. Collections in the month of the sale Collections one month after the sale 11 50% 30

On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All company's sales are made on account. The following information has been provided by Spicer's management. Month January February March April May Credit Sales $ 300,000 (actual) 400,000 (actual) 634,000 (estimated) 876,000 (estimated) 800,000 (estimated) The company's collection activity on credit sales historically has been as follows. Collections in the month of the sale Collections one month after the sale 11 50% 30

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company has 30% of its sales for cash and 70% of its sales on credit. All credit sales are fully collected in the first month after the sale. Budgeted sales are $60,200 for January, $84,200 for February, and $108,200 for March. December sales were $50,200. Prepare a schedule of cash receipts from sales for January, February, and March. Sales Cash receipts from: Cash sales Collections of prior period sales. Total cash receipts $ 60,200 $ February 84,200 $ 108,200
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