The following is the sales budget for Segura, Inc., for the first quarter of 201

Question

The following is the sales budget for Segura, Inc., for the first quarter of 2013: January February March Sales budget $138,000 $155,000 $170,000 Credit sales are collected as follows: 70 percent in the month of the sale 25 percent in the month after the sale 5 percent in the second month after the sale The accounts receivable balance at the end of the previous quarter was $68,750 ($60,000 of which was uncollected December sales).

Required: (a) Compute the sales for November. (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Sales $ (b) Compute the sales for December. (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Sales $ (c) Compute the cash collections from sales for each month from January through March. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

Cash Collection

$ January

$ February

$ March

Explanation / Answer

a. Sales for November:

Sales - December Uncollectibles = 68750 - 60000 = $8750

November Sales = 8750 / 0.05 = $175000

b. Sales for December = 60000 / 0.25 = $240000

c. Cash collections:

Jan Feb Mar Collection of sale of the month 96600 108500 119000 Collection of sale of last month 60000 34500 38750 Collection of sale of second last month 8750 12000 6900 Total Collections 165350 155000 164650

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