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 $11. Shadee’s beginning and ending finished goods inventories for May are 90 and 55 units, respectively. Ending finished goods inventory for June will be 55 units. It expects the following unit sales for the third quarter: July 530 August 500 September 450 Sixty percent of Shadee’s sales are cash. Of the credit sales, 52 percent is collected in the month of the sale, 36 percent is collected during the following month, and 12 percent is never collected. Required: Calculate Shadee’s total cash receipts for August and September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

Explanation / Answer

August September Cash sales August sales (500*$11)*60%) $                                                    3,300 September sales (450*$11)*60%) $                                                2,970 Collection from accounts receivable July sales (530*$11)*40%*36%) $                                                       840 August sales (500*$11)*40%*52%) ((500*$11)*40%)*52% = $1,144 ((500*$11)*40%)*36% = $792 September sales (450*$11)*40%)*52%) $                                                1,030 Total cash receipt $                                                    5,284 $                                                4,792

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