Freddie Reeds, a manufachurer of saxophone, oboe, and clarinet reeds, has projec

Question

Freddie Reeds, a manufachurer of saxophone, oboe, and clarinet reeds, has projected sales to be $906,000 in October $956,000 in November, $1,065,000 in December, and $928,000 in January Fredde's saes are 25s cash and 75% credt The company's colection histry indicates that credit sales are elected as flor 20% n the month of the sale 65% inthe month after the sale 8% two months after he sale 7%are never collected 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales 2 Prepare a cash collection budget for December and January Round all answers up to the nearest dolar Requirement 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales Freddie Reeds Sales Budget For the Four Months Ended January October November December January Cash sales Credit salos Total sales Requirement 2. Propare a cash oolection budget for December and January Round ail nwrs up to the nearest dolla Enter any number in the edit Selds and then continue to the next question

Explanation / Answer

Freedie Reeds   Sales Budget   October November December January Cash Sales $ 226,500.00 $ 239,000.00 $      266,250.00 $ 231,500.00 (25% of total Sales) Credit Sales $ 679,500.00 $ 717,000.00 $      798,750.00 $ 694,500.00 (75% of total Sales) Total Sales $ 906,000.00 $ 956,000.00 $ 1,065,000.00 $ 926,000.00 Freedie Reeds   Budgeted Cash Collection from Customer December January Cash Sales $ 266,250.00 $ 231,500.00 Collection of Credit Sales 20% of current Month Credit Sales $ 159,750.00 $ 138,900.00 [$798750*.20] [$694500*.20] 65% of prior month credit Sales $ 466,050.00 $ 519,187.50 [717000*.65] [$798750*.65] 8% of sales two month ago $    54,360.00 $    57,360.00 [679500*.08] [717000*.08] Total Collection of credit Sales $ 680,160.00 $ 715,447.50 TotalCash Colletion $ 946,410.00 $ 946,947.50

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