Augustine Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has proj

Question

Augustine Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be:

October November December January

$904,000 $964,000 $1,045,000 $936,000

Augustine’s sales are: 20% cash 80% credit The company’s collection history indicates that credit sales are collected as follows: 30% in the month of the sale 60% in the month after the sale 8% two months after the sale 2% are never collected Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instruction tab you will be marked wrong. Requirements 1 Prepare a sales budget for all four months, showing the breakdown between cash and credit sales. 2 Prepare a cash collections budget for December and January. a. Use cell references from the prior requirement, if applicable.

Explanation / Answer

1 Sales Budget: October November December January Sales Value 904000 964000 1045000 936000 Cash Sales(20%) 180800 192800 209000 187200 Credit Sales(80%) 723200 771200 836000 748800 904000 964000 1045000 936000 Explanation 2 Cash Collections Budget: December January December January Cash Sales 209000 187200 Month Sales*20% Credit Sales: In the Month of Sales(30%) 250800 224640 Month Credit Sales*30% In the Month After Sales(60%) 462720 501600 Nov Cr Sales*60% Dec Cr Sales*60% Two Months After Sales(8%) 57856 61696 Oct Cr Sales*8% Nov Cr Sales*8% Total Collections 980376 975136 Total Total

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