Tanner's supervisor is working on the company's budgeted balance sheet for quarter 2, and she delegates...

  

 

 

 

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Tanner's supervisor is working on the company's budgeted balance sheet for quarter 2, and she delegates budgeting for the ending A/R balance to Tanner. He gets right to work, realizing that he can't determine the June 30 A/R balance without a schedule of cash receipts, and all of that hinges on the sales forecast. He gathers information about the company's collection policies and trends, along with relevant infor- mation from the sales department, as follows. • Sales volume is expected as follows: April, 625 units; May, 800 units; June, 750 units; and July, 840 units. Average selling price is expected to be $65 per unit. • Historically, 25% of each month's sales are cash sales; #remmiming mierare on eredit. • 50% of each month's sales are credit card/debit card sales, subject to a 2% merchant fee. All appropriate receipts will be deposited into the company's account in the month of sale. • 25% of each month's sales are credit sales. 30% of credit customers pay their balance in the month of the sale and 65% pay in full the month following the sale. 5% of credit sales go uncollected. • The A/R balance on March 31 was $10,000, reflecting the remaining collectible amount from March credit sales. Required a. Help Tanner prepare the sales forecast for quarter 2 (outlining amounts for each month and for the quarter overall). b. Prepare the quarter 2 schedule of cash receipts (outlining amounts for each month and for the quarter overall). c. Determine the collectible (or net) A/R balance at the end of quarter 2. Tanner's supervisor is working on the company's budgeted balance sheet for quarter 2, and she delegates budgeting for the ending A/R balance to Tanner. He gets right to work, realizing that he can't determine the June 30 A/R balance without a schedule of cash receipts, and all of that hinges on the sales forecast. He gathers information about the company's collection policies and trends, along with relevant infor- mation from the sales department, as follows. • Sales volume is expected as follows: April, 625 units; May, 800 units; June, 750 units; and July, 840 units. Average selling price is expected to be $65 per unit. • Historically, 25% of each month's sales are cash sales; #remmiming mierare on eredit. • 50% of each month's sales are credit card/debit card sales, subject to a 2% merchant fee. All appropriate receipts will be deposited into the company's account in the month of sale. • 25% of each month's sales are credit sales. 30% of credit customers pay their balance in the month of the sale and 65% pay in full the month following the sale. 5% of credit sales go uncollected. • The A/R balance on March 31 was $10,000, reflecting the remaining collectible amount from March credit sales. Required a. Help Tanner prepare the sales forecast for quarter 2 (outlining amounts for each month and for the quarter overall). b. Prepare the quarter 2 schedule of cash receipts (outlining amounts for each month and for the quarter overall). c. Determine the collectible (or net) A/R balance at the end of quarter 2.

Answer rating: 100% (QA)

a Sales Budget Particulars April May June Quarter Budgeted unit sal... View the full answer