Exam# 309 stions-cashBudget (15marks - 20 minutes) Recreation Inc. is a localy o

Question

Exam# 309 stions-cashBudget (15marks - 20 minutes) Recreation Inc. is a localy owned sports eqipment manfacturer based in Kelowne, B.C have been recenty added to the accourting team and you note the tollowing budgeted sales and sh collectons data for 2018 Month (2018 January February March April Saless $ 212,200 S 247 300 $ 264,600 Forecast cash collections n month of sale n the first morth after sale h the second month after sale Bad debt (Uncollecible) 60% 18% 2% S 244,400 $ 296,000 $ 284,5 $ 265,400 May Note: 100%(ALL)Sales are oncredit July August September s238.2009 269.600 s 281,200 ober November December 270,300 s 277.300 Required a) Prepare a table of the expected cash gollections schedule during the month of October 2018. (4 marks) b) Prepare a table of the expected cash collections schedule during the second quarter of 2018. (8 marks) c) What is the net balance of Accounts Recelvable as at the end of the quarter in part b)? (2 Marks) Page 6 is on the back of this page (turn over)> ACCT 2250 Fall 2017

Explanation / Answer

a) Cash Collection for the m/o October is $ 265516

b) Cash Collection during the Second Quarter of 2018 is $ 792074

c) Net balance of Account receivable at the end of Second Quarter of 2018 is $ 192370

Note : It has been assumed that 2018 is the first year of operations and 2% bad debts will be acccounted at the end of year and till then this outstanding will be part of Accounts receivable

Month Sales Same Month 60% Next Month 20% In the second month after sale 18% Monthly Collection Outstanding Balance Jan-18 212200 127320 127320 84880 Feb-18 247300 148380 42440 190820 141360 Mar-18 264600 158760 49460 38196 246416 159544 Apr-18 244400 146640 52920 44514 244074 159870 May-18 296000 177600 48880 47628 274108 181762 Jun-18 284500 170700 59200 43992 273892 192370 Jul-18 265400 159240 56900 53280 269420 188350 Aug-18 238200 142920 53080 51210 247210 179340 Sep-18 269600 161760 47640 47772 257172 191768 Oct-18 281200 168720 53920 42876 265516 207452 Nov-18 270300 162180 56240 48528 266948 210804 Dec-18 277300 166380 54060 50616 271056 217048

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