Roswell Company has budgeted sales revenue as follows for the next 4 months as f

Question

Roswell Company has budgeted sales revenue as follows for the next 4 months as follows:

February

$150,000

March

$120,000

April

$105,000

May

$165,000



Past experience indicates that 80% of sales each month are on credit and that collection of credit sales occurs as follows: 60% in the month of sale, 35% in the month following the sale, and 3% in the second month following the sale. The other 2% is uncollectible.

Prepare a schedule which shows expected cash receipts from sales for the month of May.

Explanation / Answer

expected cash receipts = 120,000 x 80% x 3%(Mar) + 105,000 x 80% x35%(Apr) + 165,000 x 20%(May) + 165,000 x 80% x 60%(May) = 144,480

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.