A company estimates the following sales demand from Jan- July 2021: Sales (Units) 150,000 180,000 120,000 240,000 210,000 180,000 240,000 Month Jan Feb March April May June July Cash sales account for 50% of the total sales. Debtors are granted 2 months credit, of which half is collected in the month following sales, and the other half after 2 months. Determine the collection from sales in each of the months from April – June 2021. Explain how the credit policy offered by a company affects the budgeting exercise. (All workings must be clearly shown)
A company estimates the following sales demand from Jan- July 2021: Sales (Units) 150,000 180,000 120,000 240,000 210,000 180,000 240,000 Month Jan Feb March April May June July Cash sales account for 50% of the total sales. Debtors are granted 2 months credit, of which half is collected in the month following sales, and the other half after 2 months. Determine the collection from sales in each of the months from April – June 2021. Explain how the credit policy offered by a company affects the budgeting exercise. (All workings must be clearly shown)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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