The following is the sales budget for Tesoro Azul, Inc., for the first quarter o

Question

The following is the sales budget for Tesoro Azul, Inc., for the first quarter of 2016 January $146,000 February $163,000 March $178,000 Sales budget 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 $71,550 ($62,400 of which was uncollected December sales) a. Compute the sales for November. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Sales b. Compute the sales for December. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32) Sales c. Compute the cash collections from sales for each month from January through March. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g.,32.) Cash Collection January February March

Explanation / Answer

Answer 1 For sales in December cash Collected from sales was=70% uncolllected sales amount will be=30% which is given as 62400 Total sales in December can be computed by using 62400/30% Total sales in december= 208000 Answer 2 For sales in November Total account receivable=5% of Nov sale+uncollected amount of december sale 71550=5% of Nov sale+62400(Given) 5% Nov sale= 9150 Nov sale 9150/5% Nov sale 183000 January Feb March Answer 3 Sales 146000 163000 178000 sales collected in month of sale 102200 114100 124600 sales collected from previos month sale 52000 36500 40750 sales collected from previous two month sale 9150 10400 7300 Cash collection= 163350 161000 172650

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