The following is the sales budget for Segura, Inc., for the first quarter of 201
ID: 2765440 • Letter: T
Question
The following is the sales budget for Segura, Inc., for the first quarter of 2013:
The accounts receivable balance at the end of the previous quarter was $93,750 ($68,250 of which was uncollected December sales).
Compute the sales for November. (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
Compute the sales for December. (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
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).)
January February March Sales budget $133,000 $150,000 $165,000Explanation / Answer
a)The November sales = Total uncollected sales - the uncollected sales from December /the collection rate two months after the sale,
Hence:
November sales = ($993,750 – 68,250)/0.15
= $ 170,000
b)The December sales = Uncollected sales from December / the collection rate of the previous months’ sales,
Hence:
December sales = $ 68, 2500/0.35
= $195,000
Segura company’s Collections for each month =0 .15(Sales from 2 months ago) +0.20(Last month’s sales) +0 .65 (Current month sales)
c)January cash collections = 0.15($170,000) +0 .20($195,000) +0 .65($133,000)
= $ 25,500 +$ 39,000 + $ 86,450 = $ 150,950
February cash collections =0.15($195,000) +0 .20($133,000) +0 .65($150,000)
= $ 29,250 + $ 26,600 + $ 97,500 = $ 153,350
March cash collections =0.15($133,000) + 0.20($150,000) +0.65($165,000)
= $ 19950 + $ 30,000 + $ 107250 = $ 157,200
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