[The following information applies to the questions displayed below.] Sound Investments, Incorporated, is a large retailer of stereo equipment. The controller is about to prepare the budget for the first quarter of 20x2. Past experience has indicated that 70 percent of the store's sales are cash sales. The collection experience for the sales on account is as follows: 80 percent during month of sale 15 percent during month following sale 5 percent uncollectible The total sales for December 20x1 are expected to be $191,000. The controller feels that sales in January 20x2 could range from $101,000 to $161,000. Required: 1. Demonstrate how financial planning can be used to project cash receipts in January of 20x2 for three different levels of January sales. Use the following columnar format. $ Total Sales in January, 20x2 101,000 131,000 $ 161,000 Cash receipts in January 20x2: From December sales on account $ 8,595 From January cash sales From January sales on account 70,700 56,560x 8,595 91,700 73,360 $ 8,595 112,700 90,160x Total cash receipts $ 135,855 $ 173,655 $ 211,455 "Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

[The following information applies to the questions displayed below.] Sound Investments, Incorporated, is a large retailer of stereo equipment. The controller is about to prepare the budget for the first quarter of 20x2. Past experience has indicated that 70 percent of the store's sales are cash sales. The collection experience for the sales on account is as follows: 80 percent during month of sale 15 percent during month following sale 5 percent uncollectible The total sales for December 20x1 are expected to be $191,000. The controller feels that sales in January 20x2 could range from $101,000 to $161,000. Required: 1. Demonstrate how financial planning can be used to project cash receipts in January of 20x2 for three different levels of January sales. Use the following columnar format. $ Total Sales in January, 20x2 101,000 131,000 $ 161,000 Cash receipts in January 20x2: From December sales on account $ 8,595 From January cash sales From January sales on account 70,700 56,560x 8,595 91,700 73,360 $ 8,595 112,700 90,160x Total cash receipts $ 135,855 $ 173,655 $ 211,455 "Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

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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