S9-11 Cash collections budget (Learning Objective 3) Kessler Service anticipates
ID: 2542060 • Letter: S
Question
S9-11 Cash collections budget (Learning Objective 3) Kessler Service anticipates the following sales revenue over a five-month period: November December January February March 13,200 $14,400 The company's sales are 30% cash and 70% credit. Its collection history indicates that credit sales are collected as follows 25% in the month of the sale 50% in the month after the sale 20% two months after the sale 5% are never collected How much cash will be collected in January? In February? In March? For the quarter in total?Explanation / Answer
Answer
November
December
January
February
March
Total Sales Revenue (A)
$ 16,500.00
$ 11,200.00
$ 15,200.00
$ 13,200.00
$ 14,400.00
Cash Sales (B=A x 30%)
$ 4,950.00
$ 3,360.00
$ 4,560.00
$ 3,960.00
$ 4,320.00
Credit Sale (C=A-B)
$ 11,550.00
$ 7,840.00
$ 10,640.00
$ 9,240.00
$ 10,080.00
25% of credit sale
$ 2,887.50
$ 1,960.00
$ 2,660.00
$ 2,310.00
$ 2,520.00
50% of credit sale
$ 5,775.00
$ 3,920.00
$ 5,320.00
$ 4,620.00
$ 5,040.00
20% of credit sale
$ 2,310.00
$ 1,568.00
$ 2,128.00
$ 1,848.00
$ 2,016.00
January
February
March
Total
Cash Sales
$ 4,560.00
$ 3,960.00
$ 4,320.00
$ 12,840.00
Cash collected from credit sale:
Of November
$ 2,310.00
$ 2,310.00
of December
$ 3,920.00
$ 1,568.00
$ 5,488.00
Of January
$ 2,660.00
$ 5,320.00
$ 2,128.00
$ 10,108.00
Of February
$ 2,310.00
$ 4,620.00
$ 6,930.00
Of March
$ 2,520.00
$ 2,520.00
Total cash collection
$ 13,450.00
$ 13,158.00
$ 13,588.00
$ 40,196.00
November
December
January
February
March
Total Sales Revenue (A)
$ 16,500.00
$ 11,200.00
$ 15,200.00
$ 13,200.00
$ 14,400.00
Cash Sales (B=A x 30%)
$ 4,950.00
$ 3,360.00
$ 4,560.00
$ 3,960.00
$ 4,320.00
Credit Sale (C=A-B)
$ 11,550.00
$ 7,840.00
$ 10,640.00
$ 9,240.00
$ 10,080.00
25% of credit sale
$ 2,887.50
$ 1,960.00
$ 2,660.00
$ 2,310.00
$ 2,520.00
50% of credit sale
$ 5,775.00
$ 3,920.00
$ 5,320.00
$ 4,620.00
$ 5,040.00
20% of credit sale
$ 2,310.00
$ 1,568.00
$ 2,128.00
$ 1,848.00
$ 2,016.00
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