The sales budget for Andrew Inc. is forecasted as follows: Month Sales Revenue May $ 150,000...

   

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The sales budget for Andrew Inc. is forecasted as follows: Month Sales Revenue May $ 150,000 June 175,000 July 160,000 August 200,000 To prepare a cash budget, the company must determine the budgeted cash collections from sales. Historically, the following trend has been established regarding cash collection of sales: 60 percent in the month of sale. • 20 percent in the month following sale. • 15 percent in the second month following sale. 5 percent uncollectible. The company gives a 2% cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $85,000, of which $25,000 represents uncollected March sales and $60,000 represents uncollected April sales. (Hint: For collections of March and April receivables, start by determining total sales for the month. Assume the normal sales pattern.) Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a three-month summary of estimated cash collections. The sales budget for Andrew Inc. is forecasted as follows: Month Sales Revenue May $ 150,000 June 175,000 July 160,000 August 200,000 To prepare a cash budget, the company must determine the budgeted cash collections from sales. Historically, the following trend has been established regarding cash collection of sales: 60 percent in the month of sale. • 20 percent in the month following sale. • 15 percent in the second month following sale. 5 percent uncollectible. The company gives a 2% cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $85,000, of which $25,000 represents uncollected March sales and $60,000 represents uncollected April sales. (Hint: For collections of March and April receivables, start by determining total sales for the month. Assume the normal sales pattern.) Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a three-month summary of estimated cash collections.

Answer rating: 100% (QA)

May Sales Sales Revenue 150000 2 Cash Discount for May sales 2 of 150000 3000 collected in May Tot... View the full answer