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iPad 10:04 PM ezto.mheducation.com Time remaining: 1:55:54 3. ABC Company\'s bud

ID: 2441337 • Letter: I

Question

iPad 10:04 PM ezto.mheducation.com Time remaining: 1:55:54 3. ABC Company's budgeted sales for June, July, and August are 15,200, 19,200, and 17,200 units respectively. The selling price for each unit is $15. Based on past experience, ABC expects that 30% of a month's sales will be collected in the month of sale, 60% in the following month, and 7% in the second month following the sale. Required: Prepare an analysis of cash receipts from sales for ABC Company for August. June July August Budgeted sales units Unit selling price Budgeted sales revenue August collections: Current month's sales Prior month's sales Second prior month's sales Total collections eBook & Resources

Explanation / Answer

Answers

June

July

August

Budgeted Sales Unit

15,200

19,200

17,200

Unit Selling price

$                                     15.00

$                       15.00

$                            15.00

Budgeted Sales Revenue

$                           228,000.00

$             288,000.00

$                   258,000.00

August Collections:

Workings [Credit sale and % collectable]

Current Month's sale

$                           258,000.00

30%

$                     77,400.00

Prior Month's sale

$                           288,000.00

60%

$                   172,800.00

Second prior month's sales

$                           228,000.00

7%

$                     15,960.00

Total collections

$                   266,160.00

June

July

August

Budgeted Sales Unit

15,200

19,200

17,200

Unit Selling price

$                                     15.00

$                       15.00

$                            15.00

Budgeted Sales Revenue

$                           228,000.00

$             288,000.00

$                   258,000.00

August Collections:

Workings [Credit sale and % collectable]

Current Month's sale

$                           258,000.00

30%

$                     77,400.00

Prior Month's sale

$                           288,000.00

60%

$                   172,800.00

Second prior month's sales

$                           228,000.00

7%

$                     15,960.00

Total collections

$                   266,160.00