Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $896,000 in October, $956,000 in November, $1,045,000 in December, and $928,000 in January. Rovniak's sales are 20% cash and 80% credit. The company's collection history indicates that credit sales are collected as follows: 25% in the month of the sale 60% in the month after the sale 12% two months after the sale 3% are never collected Requirement 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales. Rovniak Reeds Sales Budget For the Four Months Ended January October November December January Cash sales Credit sales Total sales Requirement 2. Prepare a cash collection budget for December and January. Round all answers up to the nearest dollar. Rovniak Reeds Budgeted Cash Collections from Customers For the Months of December and January December January Cash sales Collection of credit sales: 25% of current month credit sales 60% of prior month credit sales 12% of credit sales two months ago Total collection of credit sales Total cash collections
Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $896,000 in October, $956,000 in November, $1,045,000 in December, and $928,000 in January. Rovniak's sales are 20% cash and 80% credit. The company's collection history indicates that credit sales are collected as follows: 25% in the month of the sale 60% in the month after the sale 12% two months after the sale 3% are never collected Requirement 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales. Rovniak Reeds Sales Budget For the Four Months Ended January October November December January Cash sales Credit sales Total sales Requirement 2. Prepare a cash collection budget for December and January. Round all answers up to the nearest dollar. Rovniak Reeds Budgeted Cash Collections from Customers For the Months of December and January December January Cash sales Collection of credit sales: 25% of current month credit sales 60% of prior month credit sales 12% of credit sales two months ago Total collection of credit sales Total cash collections
Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $896,000 in October, $956,000 in November, $1,045,000 in December, and $928,000 in January. Rovniak's sales are 20% cash and 80% credit. The company's collection history indicates that credit sales are collected as follows: 25% in the month of the sale 60% in the month after the sale 12% two months after the sale 3% are never collected Requirement 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales. Rovniak Reeds Sales Budget For the Four Months Ended January October November December January Cash sales Credit sales Total sales Requirement 2. Prepare a cash collection budget for December and January. Round all answers up to the nearest dollar. Rovniak Reeds Budgeted Cash Collections from Customers For the Months of December and January December January Cash sales Collection of credit sales: 25% of current month credit sales 60% of prior month credit sales 12% of credit sales two months ago Total collection of credit sales Total cash collections
Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $896,000 in October, $956,000 in November, $1,045,000 in December, and $928,000 in January. Rovniak's sales are 20% cash and 80% credit. The company's collection history indicates that credit sales are collected as follows:
25% in the month of the sale
60% in the month after the sale
12% two months after the sale
3% are never collected
Requirement 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales.
Rovniak Reeds
Sales Budget
For the Four Months Ended January
October
November
December
January
Cash sales
Credit sales
Total sales
Requirement 2. Prepare a cash collection budget for December and January. Round all answers up to the nearest dollar.
Rovniak Reeds
Budgeted Cash Collections from Customers
For the Months of December and January
December
January
Cash sales
Collection of credit sales:
25% of current month credit sales
60% of prior month credit sales
12% of credit sales two months ago
Total collection of credit sales
Total cash collections
Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.
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