Crew Clothing (CC) sells women’s resort casual clothing to high-end department s

Question

Crew Clothing (CC) sells women’s resort casual clothing to high-end department stores and in its own retail boutiques. CC expects sales for January, February, and March to be $500,000, $560,000, and $580,000, respectively. Twenty percent of CC’s sales are cash, with the remainder collected evenly over two months. During December, CC’s total sales were $810,000. CC is beginning its budget process and has asked for your help in preparing the cash budget.

Compute CC’s expected cash receipts from customers for each month.

If someone could please explain step by step on how to solve this problem. I've tried multiple times now and I can't seem to get the right answer.

January February March Budgeted Cash Receipts

Explanation / Answer

The correct answer is :

Notes :

1. Cash Sales (20%) is received in the month of sale itself

2. Credit Sales ( 80%) is received in 2 months equally. This means sales of December is received 1/2 in December and 1/2 in January.

Further, Credit Sales of January is received as under:

1/2 in January and 1/2 in February

Further, Credit Sales of February is received as under:

1/2 in February and 1/2 in March.

3. Cash Sales andf Credit Sales :

4. Collections:

January February March   Budgeted Cash Receipts 6,24,000 5,36,000 5,72,000

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.