Help me please Western Corporation's sales are all credit sales. Past collection history indicates that credit sales arecollected as follows:20% in the month of sale70% in the month following sale10% in the second month following saleFor the upcoming year, sales are budgeted to be as follows:January $45,000February $50,000March $40,000|CalculationCollected inMarchJanuary Sales CollectedFebruary Sales CollectedMarch Sales CollectedTotalHow much willcash collectionsbefor March?$8,000$47,500$48,000

Cash budget is prepared by entities with a view to estimate the total cash collection and cash…

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Business

Accounting

How much willcash collectionsbefor March? $8,000 $47,500 $48,000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 14EA: Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is...

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Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the follow sales: In Shalimars experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are 4,900,000 and for the fourth quarter of the current year are 6,850,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. 2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. 3. What if the recession led Shalimars top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.
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