Shadee Corp. expects to sell 620 sun visors in May and 420 in June. Each visor s

Question

Shadee Corp. expects to sell 620 sun visors in May and 420 in June. Each visor sells for $15. Shadee’s beginning and ending finished goods inventories for May are 65 and 50 units, respectively. Ending finished goods inventory for June will be 50 units. It expects the following unit sales for the third quarter:  

July 545 August 450 September 450

Sixty percent of Shadee’s sales are cash. Of the credit sales, 52 percent is collected in the month of the sale, 35 percent is collected during the following month, and 13 percent is never collected.

Required: Calculate Shadee’s total cash receipts for August and September

Explanation / Answer

Answer:-

where:-

Calculation of Shadee Corp.Cash Receipts Particluars July August September $ $ $ Credit sales 3270 2700 2700 Cash Collection:- Cash Sales 4905 4050 4050 52% in month of sale 3270*52%=1700 2700*52%=1404 2700*52%=1404 35% in following month sale 3270*35%=1145 2700*35%=945 Total collection 6599 6399

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