Spencer Company has budgeted sales for the upcoming months as follows: February

Question

Spencer Company has budgeted sales for the upcoming months as follows: February 601,000 March Aimil May $ 618,000 $ 646,000 $ 678,000 80% of the sales are credit sales, the remainder are made in cash. Credit sales are collected 40% in the month of sale, 45% in the month following the sale, and 15% in the second month following the sale. a. Compute Spencer's cash receipts for April. (Do not round intermediate calculations.) Cash Receipts b. Compute Spencer's cash receipts for May. (Do not round intermediate calculations.) Cash Receipla c. Compute the accounts receivable balance for May 31. (Do not round intermediate calculations.) Accounts Receivable Balance

Explanation / Answer

feb mar apr may June July Credit sale (80% of total sale) 480800 494400 516800 542400 cash sale 120200 123600 129200 135600 cash receipts from credit sale in same month (40%) 192320 197760 206720 216960 cash receipts from credit sale in previous month (45%) 216360 222480 232560 244080 cash receipts from credit sale previous to previous month (15%) 72120 74160 77520 81360 Total cash recipts 312520 537720 630520 659280 Total accounts receivable for may 31 = amounts to be received after may = 244080+77520+81360 402960

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