Cautious Company has the following sales projection (in units) for the next six

Question

Cautious Company has the following sales projection (in units) for the next six months: feb: 2400 Mar: 2600 Apr: 2200 May: 2900 Jun:2500 Jul: 2000 Each unit sells for $31 through April and $33 starting in May. Cautious has prepared the following sales budget for the quarter of April, May and June: All of the sales are on credit. Cautious collects from customers as follows: 50% of sales in the month of sale 25% in the month following the sale, and 25% in the second month following the sale Prepare a cash receipts budget on paper or in Excel for the quarter of April, May and June. What is budgeted cash receipts June?

Explanation / Answer

Cash receipts Budget :

Budgeted Cash Receipts for month of June = $ 73700

Feb March April May June Sales ( in units) 2400 2600 2200 2900 2500 Rate per unit 31 31 31 33 33 Sales Revenue 74400 80600 68200 95700 82500 50% cash of month sales 37200 40300 34100 47850 41250 25% cash of preceeding month 18600 20150 17050 23925 25% cash of second preceeding month 9300 10075 8525 63550 74975 73700

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