Question 3 3.5 pts Shown below are budgeted sales for Betty DeRose, Inc. Budgete

Question

Question 3 3.5 pts Shown below are budgeted sales for Betty DeRose, Inc. Budgeted Sales in Units 8,100 units 6,300 units 4,100 units January February March April 6,900 units May ???? units The selling price is $15 per unit. 20% of the company's sales are cash sales and 80% of the company's sales are made on account. The sales on account are collected in the pattern 30% in the month of sale, 35% in the month following sale, 20% in the second month following sale, and the final 15% is collected in the third month following sale. Assume Betty's pro forma balance sheet at May 31 reported a budgeted accounts receivable balance of $122,376. Calculate the number of units budgeted to be sold in May. Do not use decimals, the $, or type the word units after your answer.

Explanation / Answer

Answer:-

Workings:-

Answer:- Budgeted accounts receivable at may 31:-            $122376

Less:-

Remaining March month accounts receivable =$49200*15% =$7380

Remaining April month accounts receivable =$82800*35% =$28980

May month accounts receivable                                             =$86016

In May month only 30 % of credit sales has been received hence total credit sales should be

=$86016/70% =$122880

Total sales =$122880/80% = $153600

Number of units budgeted to be sold =$153600/$15 per unit =10240 units

Statement of cash collection from debtors Particulars January February March April May Budgeted Sales Units (A) 8100 6300 4100 6900 10240 Selling price per unit (B) $15 per unit $15 per unit $15 per unit $15 per unit $15 per unit Budgeted Sales $ (C=A*B) 121500 94500 61500 103500 153600 Cash Sales 20% (D) 24300 18900 12300 20700 30720 Credit sales 80% 97200 75600 49200 82800 122880 Cash Collection (E) 30% in month of sale 29160 22680 14760 24840 36864 35% in following month of sale 34020 26460 17220 28980 20% in the second month following sale 19440 15120 9840 Final 15% in the third month following sale 14580 11340 Total collection F=D+E 53460 75600 72960 92460 117744

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