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Budgeted Cash Collections, Budgeted Cash Payments Historically, Ragman Company has had no significant bad debt experience with its customers. Cash sales have accounted for 20 percent of total sales, and payments for credit sales have been received as follows: 40 percent of credit sales in the month of the sale 35 percent of credit sales in the first subseguent month 20 percent of credit sales in the second subsequent month 5 percent of credit sales in the third subsequent month The forecast for both cash and credit sales is as follows. January $185,000 February 183,000 March 193,000 Аpril 196,000 May 220,000 Required: 1. What is the forecasted cash inflow for Ragman Company for May? 2. Due to deteriorating economic conditions, Ragman Company has now decided that its cash forecast should include a bad debt adjustment of 2 percent of credit sales, beginning with sales for the month of April. Because of this policy change, w will happen to the total expected cash inflow related to sales made in April? (CMA adapted) Cash will by

Budgeted Cash Collections, Budgeted Cash Payments Historically, Ragman Company has had no significant bad debt experience with its customers. Cash sales have accounted for 20 percent of total sales, and payments for credit sales have been received as follows: 40 percent of credit sales in the month of the sale 35 percent of credit sales in the first subseguent month 20 percent of credit sales in the second subsequent month 5 percent of credit sales in the third subsequent month The forecast for both cash and credit sales is as follows. January $185,000 February 183,000 March 193,000 Аpril 196,000 May 220,000 Required: 1. What is the forecasted cash inflow for Ragman Company for May? 2. Due to deteriorating economic conditions, Ragman Company has now decided that its cash forecast should include a bad debt adjustment of 2 percent of credit sales, beginning with sales for the month of April. Because of this policy change, w will happen to the total expected cash inflow related to sales made in April? (CMA adapted) Cash will by

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Budgeted Cash Collections, Budgeted Cash Payments

Budgeted Cash Collections, Budgeted Cash Payments Historically, Ragman Company has had no significant bad debt experience with its customers. Cash sales have accounted for 20 percent of total sales, and payments for credit sales have been received as follows: 40 percent of credit sales in the month of the sale 35 percent of credit sales in the first subseguent month 20 percent of credit sales in the second subsequent month 5 percent of credit sales in the third subsequent month The forecast for both cash and credit sales is as follows. January $185,000 February 183,000 March 193,000 April 196,000 May 220,000 Required: 1. What is the forecasted cash inflow for Ragman Company for May? 2. Due to deteriorating economic conditions, Ragman Company has now decided that its cash forecast should include a bad debt adjustment of 2 percent of credit sales, beginning with sales for the month of April. Because of this policy change, what will happen to the total expected cash inflow related to sales made in April? (CMA adapted) Cash will by $
Transcribed Image Text:Budgeted Cash Collections, Budgeted Cash Payments Historically, Ragman Company has had no significant bad debt experience with its customers. Cash sales have accounted for 20 percent of total sales, and payments for credit sales have been received as follows: 40 percent of credit sales in the month of the sale 35 percent of credit sales in the first subseguent month 20 percent of credit sales in the second subsequent month 5 percent of credit sales in the third subsequent month The forecast for both cash and credit sales is as follows. January $185,000 February 183,000 March 193,000 April 196,000 May 220,000 Required: 1. What is the forecasted cash inflow for Ragman Company for May? 2. Due to deteriorating economic conditions, Ragman Company has now decided that its cash forecast should include a bad debt adjustment of 2 percent of credit sales, beginning with sales for the month of April. Because of this policy change, what will happen to the total expected cash inflow related to sales made in April? (CMA adapted) Cash will by $
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