Boutique Ltd is a retailer of ladies fashion and has the following historical collection pattern for its
Question:
Boutique Ltd is a retailer of ladies’ fashion and has the following historical collection pattern for its credit sales:
70 per cent collected in the month of sale
15 per cent collected in the first month after sale
10 per cent collected in the second month after sale
4 per cent collected in the third month after sale
1 per cent uncollectable.
The credit sales have been budgeted for the last seven months of the year, as shown below:
June $245 000
July 300 000
August 350 000
September 400 000
October 450 000
November 500 000
December 425 000
Required:
Build an Excel spreadsheet to solve the following requirements.
1. Calculate the estimated total cash receipts during October from credit sales.
2. Calculate the estimated total cash receipts during the December quarter from credit sales during that quarter.
3. Use your spreadsheet to demonstrate how your answers for requirements 1 and 2 will change if June and July sales are $350 000 and $425 000, respectively.
Advanced Financial Accounting
ISBN: 978-0132928939
7th edition
Authors: Thomas H. Beechy, V. Umashanker Trivedi, Kenneth E. MacAulay