Blue Spruce Company has budgeted sales revenue as follows for the next 4 months:FebruaryMarchAprilMay$305,000245,000225,000325,000Past experience indicates that 70% of sales each month are on credit. The remainder are cash sales. Collection of credit sales occurs asfollows: 60% in the month of sale, 35% in the month following the sale, and 3% in the second month following the sale. The other 2% isuncollectible.Prepare a schedule which shows expected cash receipts from sales for the month of May. Blue Spruce Company has budgeted sales revenue as follows for the next 4 months:FebruaryMarchAprilMay$305,000245,000225,000325,000Past experience indicates that 70% of sales each month are on credit. The remainder are cash sales. Collection of credit sales occurs asfollows: 60% in the month of sale, 35% in the month following the sale, and 3% in the second month following the sale. The other 2% isuncollectible.Prepare a schedule which shows expected cash receipts from sales for the month of May.

A cash receipts budget for sales is a financial document that outlines the expected inflows of cash…

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Prepare a schedule which shows expected cash receipts from sales for the month of May. BLUE SPRUCECOMPANY Expected Cash Receipts from Sales March sales Credit sales April sales Credit sales 10

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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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

Blue Spruce Company has budgeted sales revenue as follows for the next 4 months:
February
March
April
May
$305,000
245,000
225,000
325,000
Past experience indicates that 70% of sales each month are on credit. The remainder are cash sales. Collection of credit sales occurs as
follows: 60% in the month of sale, 35% in the month following the sale, and 3% in the second month following the sale. The other 2% is
uncollectible.
Prepare a schedule which shows expected cash receipts from sales for the month of May.

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