Schedule of Cash Collections on Accounts Receivable and Cash Budget Roybal Inc. sells all of its product on account. Roybal has the following accounts receivable payment experience: Percent paid in the month of sale 20 Percent paid in the month after the sale 55 Percent paid in the second month after the sale 23 To encourage payment in the month of sale, Roybal gives a 2% cash discount. Roybal's anticipated sales for the next few months are as follows: April $266,000 May 347,200 June 364,000 July 336,000 August 420,000 Required: 1. Prepare a schedule of cash receipts for July. Be sure to enter percentages as whole numbers. Roybal Inc. Schedule of Cash Receipts For July Payments on account: From May credit sales: $ × % $ From June credit sales: $ × % From July credit sales: $ × % Less: July cash discount $ × % Cash receipts $ Feedback 2. Prepare a schedule of cash receipts for August. Be sure to enter percentages as whole numbers. Roybal Inc. Schedule of Cash Receipts For August Payments on account: From June credit sales: $ × % $ From July credit sales: $ × % From August credit sales: $ × % Less: August cash discount $ × % Cash receipts $
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.
Schedule of Cash Collections on
Roybal Inc. sells all of its product on account. Roybal has the following accounts receivable payment experience:
| Percent paid in the month of sale | 20 | ||
| Percent paid in the month after the sale | 55 | ||
| Percent paid in the second month after the sale | 23 |
To encourage payment in the month of sale, Roybal gives a 2% cash discount. Roybal's anticipated sales for the next few months are as follows:
| April | $266,000 | |
| May | 347,200 | |
| June | 364,000 | |
| July | 336,000 | |
| August | 420,000 |
Required:
1. Prepare a schedule of cash receipts for July. Be sure to enter percentages as whole numbers.
| Roybal Inc. Schedule of Cash Receipts For July |
||||
| Payments on account: | ||||
| From May credit sales: | ||||
| $
|
$
|
|||
| From June credit sales: | ||||
| $
|
|
|||
| From July credit sales: | ||||
| $
|
|
|||
| Less: July cash discount | ||||
| $
|
|
|||
| Cash receipts | $
|
2. Prepare a schedule of cash receipts for August. Be sure to enter percentages as whole numbers.
| Roybal Inc. Schedule of Cash Receipts For August |
||||
| Payments on account: | ||||
| From June credit sales: | ||||
| $
|
$
|
|||
| From July credit sales: | ||||
| $
|
|
|||
| From August credit sales: | ||||
| $
|
|
|||
| Less: August cash discount | ||||
| $
|
|
|||
| Cash receipts | $ |
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