Shadee Corp. expects to sell 560 sun visors in May and 350 in June. Each visor s

Question

Shadee Corp. expects to sell 560 sun visors in May and 350 in June. Each visor sells for $11. Shadee’s beginning and ending finished goods inventories for May are 75 and 55 units, respectively. Ending finished goods inventory for June will be 60 units. It expects the following unit sales for the third quarter: July 560 August 480 September 440 Sixty percent of Shadee’s sales are cash. Of the credit sales, 54 percent is collected in the month of the sale, 35 percent is collected during the following month, and 11 percent is never collected. Required: Calculate Shadee’s total cash receipts for August and September.

Explanation / Answer

Calculate Shadee’s total cash receipts for August and September.

August September Cash sales 3168 2904 Collection from customer 54% of the month of sale 1140.48 1045.44 35% of the prior mont sale 862.40 739.20 Total cash receipt 5170.88 4688.64

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