Shadee Corp. expects to sell 600 sun visors in May and 430 in June. Each visor s

Question

Shadee Corp. expects to sell 600 sun visors in May and 430 in June. Each visor sells for $19. Shadee's beginning and ending finished goods inventories for May are 65 and 45 units, respectively. Ending finished goods inventory for June will be 65 units. It expects the following unit sales for the third quarter: Sixty percent of Shadee's sales are cash. Of the credit sales, 52 percent is collected in the month of the sale, 37 percent is collected during the following month, and 11 percent is never collected. Required: Calculate Shadee's total cash receipts for August and September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

Explanation / Answer

From the above calculations cash receipts for August and September are $5,198.4 and $4,967.36 respectively.

Particulars May June July August September Sales(A) 600 430 500 450 430 Selling price (B) $19.00 $19.00 $19.00 $19.00 $19.00 Sales value (C ) $11,400.00 $8,170.00 $9,500.00 $8,550.00 $8,170.00 Credit sales(D) =40% of (C ) $4,560.00 $3,268.00 $3,800.00 $3,420.00 $3,268.00 52% in month of sale (E )=52% of (D) $2,371.20 $1,699.36 $1,976.00 $1,778.40 $1,699.36 37% in the following month (F) =37% * (D) $1,687.20 $1,209.16 $1,406.00 $1,265.40 Total collections from debtors (G) =( E)+ (F) $6,931.20 $4,967.36 $5,776.00 $5,198.40 $4,967.36

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