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: 1800 Mar: 2000 Apr: 1600 May: 2300 Jun: 1900 Jul: 1400 Each unit sells for $26 through April and $29 starting in May. Cautious has prepared the following sales budget for the quarter of April, May and June: udget for the quarter of Apri, May and June: Sales Budget April 1600 x$26 $41600 May 2300 x $29 $66700 June 1900 x $29 $55100 Total 5800 Sales in units Selling price per unit Sales revenue $163400 All of the sales are on credit. Cautious collects from customers as follows: 45% of sales in the month of sale 25% in the month following the sale, and 30% 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 May?

Explanation / Answer

Cash receipts budget :

Budgeted cash receipts May is $56015

April May June Feb Sales 14040 March Sales 13000 15600 April sales 18720 10400 12480 May Sales 30015 16675 June sales 24795 Total Cash receipts 45760 56015 53950

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