months: The Fraley Corporation, a merchandising firm, has planned the following

Question

months: The Fraley Corporation, a merchandising firm, has planned the following sales for the next four March April May June Total budgeted sales $50,000 $70,000 $90,000 $60,000 Sales are made 40% for cash and 60% on account. From experience, the company has learned that a month's sales on account are collected according to the following pattern: Month of sale First month following month of sale 20% second month following month of sale 8% Uncollectible 70% 2% The company requires a minimum cash balance of $4,000 to start a month. Required: a. Compute the budgeted cash receipts for June

Explanation / Answer

a) Cash receipts for june june cash sale (60,000*40%)= 24000 Credit sale April sale (70000*60%*8%) 3360 may sales (90,000*60%*20%) 10800 june sales (60,000*60%*70%) 25200 cash receipts for june 63360

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