Concept explainers
Budget: It is forward looking exercise which the company takes by preparing estimated revenues, costs and resources needed by company for a period. It can be prepared for single period or for multiple periods
The cash collection of sales for the month of July and August
The cash collections of sales for month of July and August is given below
The following information is required to calculate cash collection of sales for the month of July and August
- The sales amount for the month of May, June, July and august is $240,000, $280,000, $300,000 and $350,000
- The cash collection of sales are 30% of sales amount on the month of sales, the following month 50% will be collected and 18% the following month means the sales amount of May of $240,000 will be collected as follows
- 30% of $240,000 will be collected in May
- 50% of $240,000 will be collected in June
- 18% of $240,000 will be collected in July
The cash receipt of sales amount from May, June, July and August is calculated as under
The total cash receipts for the month of July and August is $273,200 and $305,400 respectively
The total cash receipts for the month of July and August is $273,200 and $305,400 respectively
Want to see the full answer?
Check out a sample textbook solutionChapter 14 Solutions
Accounting: What the Numbers Mean
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education