9. (6 points) Use the following information to budget Cash Receipts for October

Question

9. (6 points) Use the following information to budget Cash Receipts for October and November by completing the table. You must title the lines you use in the table, using the left hand column. Note: Table may have extra lines. Customers pay for 30% of sales in month of sale Customers pay for 60% of sales in month following month ofsale 5% of sales are never collected two months following month ofsale (and 5% are never collected) Customers are offered a 2% discount if they pay in month ofsale Projected sales August $90,000$S0 · · September $80,000 OctoberNovember $70,000 Cash Receipts October November

Explanation / Answer

Cash receipts October November Sales Amount 70,000 60,000 30% sales received in the month of sales (2% Discount) $70,000*30%*0.98 20580 $60,000*30%*0.98 17640 Customers paid in the follwing Month of sales (60%) $80,000*0.60 48000 $70,000*0.60 42000 Collection after Two months of sale (5%) $90,000*0.05 4500 $80,000*0.05 4000 Cash collections 73080 63640

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