Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,640,000 Quarter 2 5,700,000 Quarter 3 6,810,000 Quarter 4 8,020,000 In Shalimar’s 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 $5,140,000 and for the fourth quarter of the current year are $7,640,000. Required: Question Content Area 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year $fill in the blank 7a3bd0f6dffefe1_1 $fill in the blank 7a3bd0f6dffefe1_2 4, current year fill in the blank 7a3bd0f6dffefe1_3 fill in the blank 7a3bd0f6dffefe1_4 1, next year fill in the blank 7a3bd0f6dffefe1_5 fill in the blank 7a3bd0f6dffefe1_6 2, next year fill in the blank 7a3bd0f6dffefe1_7 fill in the blank 7a3bd0f6dffefe1_8 3, next year fill in the blank 7a3bd0f6dffefe1_9 fill in the blank 7a3bd0f6dffefe1_10 4, next year fill in the blank 7a3bd0f6dffefe1_11 fill in the blank 7a3bd0f6dffefe1_12   Question Content Area 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. If an amount is zero, enter "0". Shalimar CompanyCash Receipts BudgetFor the Coming Year   Quarter 1 Quarter 2 Quarter 3 Quarter 4           Cash sales $fill in the blank 2eedfff79076ff8_1 $fill in the blank 2eedfff79076ff8_2 $fill in the blank 2eedfff79076ff8_3 $fill in the blank 2eedfff79076ff8_4 Received on account from:         Quarter 3, current year fill in the blank 2eedfff79076ff8_5       Quarter 4, current year fill in the blank 2eedfff79076ff8_6 fill in the blank 2eedfff79076ff8_7     Quarter 1, next year fill in the blank 2eedfff79076ff8_8 fill in the blank 2eedfff79076ff8_9 fill in the blank 2eedfff79076ff8_10   Quarter 2, next year   fill in the blank 2eedfff79076ff8_11 fill in the blank 2eedfff79076ff8_12 fill in the blank 2eedfff79076ff8_13 Quarter 3, next year     fill in the blank 2eedfff79076ff8_14 fill in the blank 2eedfff79076ff8_15 Quarter 4, next year fill in the blank 2eedfff79076ff8_16 fill in the blank 2eedfff79076ff8_17 fill in the blank 2eedfff79076ff8_18 fill in the blank 2eedfff79076ff8_19 Total cash receipts $fill in the blank 2eedfff79076ff8_20 $fill in the blank 2eedfff79076ff8_21 $fill in the blank 2eedfff79076ff8_22 $fill in the blank 2eedfff79076ff8_23   Question Content Area 3. What if the recession led Shalimar’s 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. Shalimar CompanyCash Receipts BudgetFor the Coming Year   Quarter 1 Quarter 2 Quarter 3 Quarter 4           Cash sales $fill in the blank 1dfa5301107e013_1 $fill in the blank 1dfa5301107e013_2 $fill in the blank 1dfa5301107e013_3 $fill in the blank 1dfa5301107e013_4 Received on account from:         Quarter 4, current year fill in the blank 1dfa5301107e013_5       Quarter 1, next year fill in the blank 1dfa5301107e013_6 fill in the blank 1dfa5301107e013_7     Quarter 2, next year   fill in the blank 1dfa5301107e013_8 fill in the blank 1dfa5301107e013_9   Quarter 3, next year     fill in the blank 1dfa5301107e013_10 fill in the blank 1dfa5301107e013_11 Quarter 4, next year       fill in the blank 1dfa5301107e013_12 Total cash receipts $fill in the blank 1dfa5301107e013_13 $fill in the blank 1dfa5301107e013_14 $fill in the blank 1dfa5301107e013_15 $fill in the blank 1dfa5301107e013_16

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