he Ohio Company has the following historical pattern on its credit sales: 70% collected in the month of sale, 15% collected in the first month after sale, 10% collected in the second month after sale, 4% collected in the third month after sale and 1% uncollectible. The sales on open account have been budgeted for the last six months of 2020 are shown below: July P 60,000; August 70,000; September 80,000; October 90,000; November 100,000; December 85,000. What would be the estimated total cash collections during the fourth calendar quarter from sales made on open account within the fourth calendar quarter?
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.
The Ohio Company has the following historical pattern on its credit sales: 70% collected in the month of sale, 15% collected in the first month after sale, 10% collected in the second month after sale, 4% collected in the third month after sale and 1% uncollectible. The sales on open account have been budgeted for the last six months of 2020 are shown below: July P 60,000; August 70,000; September 80,000; October 90,000; November 100,000; December 85,000.
What would be the estimated total cash collections during the fourth calendar quarter from sales made on open account within the fourth calendar quarter?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
