The following is the sales budget for KuIp. Inc., for the first quarter of 2012:
ID: 2641217 • Letter: T
Question
The following is the sales budget for KuIp. Inc., for the first quarter of 2012: Credit sales are collected as follows: 55 percent in the month of the sale 30 percent in the month after the sale 15 percent in the second month after the sale The accounts receivable balance at the end of the previous quarter was $82,000 ($52,000 of which was uncollected December sales). a. Calculate the sales for November. November sales $ b. Calculate the sales for December (Round your answer to 2 decimal places. (e.g., 32.16)) December sales $ c. Calculate the cash collections from sales for each month from January through March. (Round your answers to 2 decimal places. (e.g., 32.16)) Cash collections January $ February $ March $Explanation / Answer
Answer (a) At the end of the December the account receivable $82000 consist
account receivable for december = $52000
account receivable for november = $30000
Account receivable for nov represent only 15%($30000) which would not be received till december.
So the sale of november = 30000 * 100/15 = $200000
(b) Sales for December - $52000 * 100/ 100-55 = $ 115555.55
(c) Cash collection
In month of January
November = $20000 *15/100 = $30000
December = $115555.55 * 30/100 = $34666.665
January = $198000 *55/100 = $108900
Total = 173566.67
In the month of February
December = $115555.55 * 15/100 = $17333.32
January = $198000 *30/100 = $59400
February = $218000 *55/100 = $119900
Total = $196633.32
In the month of March
January = $198000 *15/100 = $29700
February = $218000 *30/100 = $65400
March = $241000 *55/100 = $132550
Total = $227650
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