Problem 3 Gonzales, Inc. has the following data: Accounts receivable, May 31 $40
ID: 2454620 • Letter: P
Question
Problem 3 Gonzales, Inc. has the following data:
Accounts receivable, May 31
$40,000
Forecasted sales in units
May sales
450
June sales
400
July sales
500
August sales
560
Each unit will sell for $20 during May, and then increase 10% per month thereafter. Sales consist of 70% cash and 30% credit. All credit accounts are collected in the month following the sales. Uncollectible accounts are 4% of sales. Prepare a sales budget schedule for June, July, and August.
Accounts receivable, May 31
$40,000
Forecasted sales in units
May sales
450
June sales
400
July sales
500
August sales
560
Explanation / Answer
Gonzales Inc. May June July August Sales Units 450 400 500 560 Unit selling price 20.00 22.00 24.20 26.62 Sales Revenue 9,000 8,800 12,100 14,907 Credit sales 2,700 2,640 3,630 4,472 Revenue Collection AR Balance May collection Old balance 32,327 May balance(less uncollectible) 2,340 Cash Collection 6,160 8,470 10,435 Credit Collection(less 4% uncollectible on sales) 2,288 3,146 Total collection schedule 40,827 10,758 13,581 Uncollectibel value calculated as 4% of sales (not credit sales) as mentioned May old balance 37,300 Corresponding sales 124,333 Uncollectible 4,973 Net collection 32,327
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