11.12 Budgeted cash receipts from sales LO5 Kay\'s Hardware Ltd\'s budgeted mont

Question

11.12 Budgeted cash receipts from sales LO5 Kay's Hardware Ltd's budgeted monthly sales for January to June 2019 are given below. About 70% of the monthly sales are expected to be on credit. Approximately 60% of the credit sales are collected in the month of sale, 30% in the month following the sale, and 5% in the second month following the sale: 5% are never collected and are written off. The budgeted gross sales by month are as follows. January February March April May June $115 000 162 000 139 000 125 000 150 000 130 000 Required a. Prepare a schedule of expected cash receipts from sales for April, May and June 2019.

Explanation / Answer

April May June Cash sales 37500 45000 39000 Credit sales: February sales 5670 March sales 29190 4865 April sales 52500 26250 4375 May sales 63000 31500 June sales 54600 Expected cash receipts 124860 139115 129475

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