The budgeted sales for Modern Machinery Components are shown below: February..……

Question

The budgeted sales for Modern Machinery Components are shown below:

                February..…………..$80,000

                March………....………70,000

                April….………….….....60,000

                May………………….....40,000

                June………………….….50,000

From past experience, the company has learned that 50% of a month’s sales are collected in the

month of sale, that another 40% is collected in the month following the sale, and that the remaining

10% is collected in the second month following the sale.

Prepare a schedule of expected cash collections from sales, by month and in total, for the

second quarter.

Explanation / Answer

The correct answer is :

Note :

Schedule of  cash receipts For April, May, June ( 2nd Quarter) April May June Total Cash Receipts From : Collection of Accounts Receivable 66,000 51,000 47,000 Total Budgeted Cash Receipts 66,000 51,000 47,000 1,64,000

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