7) Using the information below, calculate Party Time Inc.\'s total cash receipts

Question

7) Using the information below, calculate Party Time Inc.'s total cash receipts for January, February, and March.

Of the 11,000 “Pirate Treasure Chests” (party favor boxes) expected to be sold in Q1, 3,000 boxes are expected to be sold in January, 3,500 in February, and 4,500 in March. Each box sells for $5.50, as reflected in the Sales Budget for the year. Sixty percent of the Party Time Inc.’s sales are credit sales. Of the credit sales, 52 percent is collected in the month of the sale, 38 percent is collected during the following month, and 10 percent is collected in the second month following the sale. Assume that there were $4,000 of accounts receivable from last year's sales that will be collected in January.

Jan.

Feb.

March

Budgeted Sales Revenue

Cash Sales 40%

Credit sales current 52%

Credit Sales Next 38%

Credit Sales 2nd 10%

Total Cash Receipts (Cash Collected)

Jan.

Feb.

March

Budgeted Sales Revenue

Cash Sales 40%

Credit sales current 52%

Credit Sales Next 38%

Credit Sales 2nd 10%

Total Cash Receipts (Cash Collected)

Explanation / Answer

Feb. March Jan. Budgeted Sales Revenue     16,500     19,250        24,750 Cash Sales 40%       6,600       7,700          9,900 Credit sales current 52%       5,148       6,006          7,722 Credit Sales Next 38%              -         3,762          4,389 Credit Sales 2nd10%              -                -               990 Accounts receivables       4,000              -                  -   Total Cash Receipts (Cash Collected)     32,248     36,718        47,751

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

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