Don't give answer in image format Papst Company is preparing its cash budget for the month of May. The following information is available concerning its accountsreceivable (based on sales made to customers on open account):Actual credit sales for MarchActual credit sales for AprilEstimated credit sales for MayEstimated collections in the month of sale.Estimated collections in the first month after the month of saleEstimated collections in the second month after the month of saleEstimated provision for bad debts (made in the month of sale)The firm writes off all uncollectible accounts at the end of the second month after the month of sale.Required:Determine for Papst Company for the month of May.$ 180,000$ 230,000$ 330,0001. The estimated cash receipts from accounts receivable collectionsA2. The gross amount of accounts receivable at the end of the month (after appropriate write-off of uncollectible accounts).3. The net amount of accounts receivable at the end of the month.1. Estimated cash receipts2 Gross accounts receivable25%60%10%5%4. Recalculate requirements 1 and 2 under the assumption that estimated collections in the month of sale equal 60% and in the firstmonth following the month of sale equal 25%3. Net accounts receivable4a. Estimated cash receipts4b Gross accounts receivable

Estimated cash receipts is calculated by calculating the percentage of collection received from…

1 The estimated cash receipts from accounts receivable collections. 2. The gross amount of accounts receivable at the end of the month (after appropriate write-off of uncollectible accounts). 3. The net amount of accounts receivable at the end of the month. 4. Recalculate requirements 1 and 2 under the assumption that estimated collections in the month of sale equal 60% and in the first month following the month of sale equal 25%

1 The estimated cash receipts from accounts receivable collections. 2. The gross amount of accounts receivable at the end of the month (after appropriate write-off of uncollectible accounts). 3. The net amount of accounts receivable at the end of the month. 4. Recalculate requirements 1 and 2 under the assumption that estimated collections in the month of sale equal 60% and in the first month following the month of sale equal 25%

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 9EB: Cash collections for Renew Lights found that 65% of sales were collected in the month of sale, 25%...

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

Don't give answer in image format

Papst Company is preparing its cash budget for the month of May. The following information is available concerning its accounts
receivable (based on sales made to customers on open account):
Actual credit sales for March
Actual credit sales for April
Estimated credit sales for May
Estimated collections in the month of sale.
Estimated collections in the first month after the month of sale
Estimated collections in the second month after the month of sale
Estimated provision for bad debts (made in the month of sale)
The firm writes off all uncollectible accounts at the end of the second month after the month of sale.
Required:
Determine for Papst Company for the month of May.
$ 180,000
$ 230,000
$ 330,000
1. The estimated cash receipts from accounts receivable collections
A
2. The gross amount of accounts receivable at the end of the month (after appropriate write-off of uncollectible accounts).
3. The net amount of accounts receivable at the end of the month.
1. Estimated cash receipts
2 Gross accounts receivable
25%
60%
10%
5%
4. Recalculate requirements 1 and 2 under the assumption that estimated collections in the month of sale equal 60% and in the first
month following the month of sale equal 25%
3. Net accounts receivable
4a. Estimated cash receipts
4b Gross accounts receivable

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