Detmer Enterprises has budgeted sales for the next four months as follows: Budge

Question

Detmer Enterprises has budgeted sales for the next four months as follows:

Budgeted Sales in Units:

January 7,400 units

February 5,300 units

March 3,900 units

April ????? units

Detmer's product sells for $20 each. Experience has shown that 10% of the company's sales are cash sales and 90% of the company's sales are made on account. The sales on account are collected in the pattern 30% in the month of sale, 45% in the month following sale, and 25% is collected in the second month following sale. Detmer's pro forma balance sheet at April 30 reported a budgeted accounts receivable balance of $104,490.

Calculate the number of units budgeted to be sold in April.

Explanation / Answer

Ans-

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Detail $ Account receivable 104,490 March sales Collection (70,200*25%) 17,550 April Sales Collection 86,940 70% collection in following months of sales(86,940/70*100) 124200 90% is on account sales (124200/90*100) 138000 Sales/unit (138000/20) 6900

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