Quality Crafts is planning for the 1 st quarter ending September 2023, and has supplied the following
Question:
Quality Crafts is planning for the 1st quarter ending September 2023, and has supplied the following information:
Purchases
The forecast sales for the next three months are:
Month Sales ($)
July 80 000
August 65 000
September 50 000
30% of its sales are in cash, and the remainder is on credit. Of the credit sales, 40% is paid in the month of sale, and 55% is paid in the month after the sale. The remaining 5% is deemed uncollectable. The 30 June accounts receivable balance is $25 000. The company plans to sell some of its office furniture in October for $20 000.
Required:
a) Make a schedule of expected cash receipts for each of the three months (July - September), including the total cash receipts for the quarter. b) Comment on Quality Crafts expected cash position in the upcoming 1st quarter of 2023.
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura