Del Spencer is the owner and founder of Del Spencer's Men's Clothing Store. Del Spencer's has its own house charge accounts and has found from past experience that 10 percent of its sales are for cash. The remaining 90 percent are on credit. An aging schedule for accounts receivable reveals the following pattern: 15 percent of credit sales are paid in the month of sale. 65 percent of credit sales are paid in the first month following the sale. 14 percent of credit sales are paid in the second month following the sale. 6 percent of credit sales are never collected. Credit sales that have not been paid until the second month following the sale are considered overdue and are subject to a 3 percent late charge. Del Spencer's has developed the following sales forecast: May $60,000 June 53,000 July 46,000 August 57,000 September 82,000 Required: Prepare a schedule of cash receipts for August and September. Round all amounts to the nearest dollar. Del Spencer's Men's Clothing StoreSchedule of Cash ReceiptsFor the Months of August and September August September Cash sales $fill in the blank 1 $fill in the blank 2 Received from sales in: June: fill in the blank 3 July: fill in the blank 4 fill in the blank 5 August: fill in the blank 6 fill in the blank 7 September: fill in the blank 8 Total cash receipts $fill in the blank 9 $fill in the blank 10
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Schedule of Cash Receipts
Del Spencer is the owner and founder of Del Spencer's Men's Clothing Store. Del Spencer's has its own house charge accounts and has found from past experience that 10 percent of its sales are for cash. The remaining 90 percent are on credit. An aging schedule for
15 percent of credit sales are paid in the month of sale.
65 percent of credit sales are paid in the first month following the sale.
14 percent of credit sales are paid in the second month following the sale.
6 percent of credit sales are never collected.
Credit sales that have not been paid until the second month following the sale are considered overdue and are subject to a 3 percent late charge.
Del Spencer's has developed the following sales
| May | $60,000 |
| June | 53,000 |
| July | 46,000 |
| August | 57,000 |
| September | 82,000 |
Required:
Prepare a schedule of cash receipts for August and September. Round all amounts to the nearest dollar.
Del Spencer's Men's Clothing StoreSchedule of Cash ReceiptsFor the Months of August and September
| August | September | |
|---|---|---|
| Cash sales | $fill in the blank 1 | $fill in the blank 2 |
| Received from sales in: | ||
| June: | fill in the blank 3 | |
| July: | fill in the blank 4 | |
| fill in the blank 5 | ||
| August: | fill in the blank 6 | |
| fill in the blank 7 | ||
| September: | fill in the blank 8 | |
| Total cash receipts | $fill in the blank 9 | $fill in the blank 10 |
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