HealthMart is a retail store selling home oxygen equip- ment. HealthMart also services home oxygen equipment, for which the company bills customers monthly. HealthMart has budgeted for increases in service revenue of $200 each month due to a recent advertising campaign. The forecast of sales and service revenue for the March-June 2018 is as follows: Sales and Service Revenues Budget March-June 2018 Expected Sales Revenue Expected Service Revenue Total Revenue Month March April May June $6,00 8,000 7,500 9,000 $4,000 $ 10,000 12,200 11,900 13,600 4,400 4,600

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Almost all of the sales revenues of the oxygen equipment are credit card sales; cash sales are negligible. The credit card company deposits 97% of the revenues recorded each day into HealthMart’s account overnight. For the servicing of home oxygen equipment, 60% of oxygen services billed each month is collected in the month of the service, and 40% is collected in the month following the service.

Q. Calculate the cash that HealthMart expects to collect in April, May, and June 2018 from sales and service revenues. Show calculations for each month.

HealthMart is a retail store selling home oxygen equip-
ment. HealthMart also services home oxygen equipment, for which the company bills customers monthly.
HealthMart has budgeted for increases in service revenue of $200 each month due to a recent advertising
campaign. The forecast of sales and service revenue for the March-June 2018 is as follows:
Sales and Service Revenues Budget March-June 2018
Expected Sales Revenue
Expected Service Revenue
Total Revenue
Month
March
April
May
June
$6,00
8,000
7,500
9,000
$4,000
$ 10,000
12,200
11,900
13,600
4,400
4,600
Transcribed Image Text:HealthMart is a retail store selling home oxygen equip- ment. HealthMart also services home oxygen equipment, for which the company bills customers monthly. HealthMart has budgeted for increases in service revenue of $200 each month due to a recent advertising campaign. The forecast of sales and service revenue for the March-June 2018 is as follows: Sales and Service Revenues Budget March-June 2018 Expected Sales Revenue Expected Service Revenue Total Revenue Month March April May June $6,00 8,000 7,500 9,000 $4,000 $ 10,000 12,200 11,900 13,600 4,400 4,600
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