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The management team of Magnificent Modems, Incorporated (MMI) wants to investigate the effect of several different growth rates on sales and cash receipts. Cash sales for the month of January are expected to be $10,000. Credit sales for January are expected to be $50,000. MMI collects 100 percent of credit sales in the month following the month of sale. Assume a beginning balance in accounts receivable of $48,000. Required Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 2 percent and 4 percent. The results at a growth rate of 1 percent are shown as an example. Cash sales Sales on account Total budgeted sales 2 percent 4 Percent Sales Budget January $ 210,000 50,000 $ 60,000 Cash sales Sales on account Total budgeted sales Current cash sales. Plus collections from accounts receivable Total budgeted collections. Use the following forms, assuming a growth rate of 2 percent and 4 percent: Schedule of Cash Receipts Complete this question by entering your answers in the tabs below. Current cash sales Plus collections from accounts receivable Total budgeted collections January $ Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 2 percent. Sales Budget $ Schedule of Cash Receipts $ February $ 10,100 50,500 $ 60,600 10,000 50,000 60,000 January $ < 2 percent January $ 10,000 48,000 $ 58,000 10,000 48,000 58,000 March $ 10,201 51,005 $ 61,206 Growth rate of 2% February March Growth rate of 2% March February 50,000 February $ 10,100 50,000 $ 60,100 4 Percent > March $ 10,201 50,500 $ 60,701

The management team of Magnificent Modems, Incorporated (MMI) wants to investigate the effect of several different growth rates on sales and cash receipts. Cash sales for the month of January are expected to be $10,000. Credit sales for January are expected to be $50,000. MMI collects 100 percent of credit sales in the month following the month of sale. Assume a beginning balance in accounts receivable of $48,000. Required Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 2 percent and 4 percent. The results at a growth rate of 1 percent are shown as an example. Cash sales Sales on account Total budgeted sales 2 percent 4 Percent Sales Budget January $ 210,000 50,000 $ 60,000 Cash sales Sales on account Total budgeted sales Current cash sales. Plus collections from accounts receivable Total budgeted collections. Use the following forms, assuming a growth rate of 2 percent and 4 percent: Schedule of Cash Receipts Complete this question by entering your answers in the tabs below. Current cash sales Plus collections from accounts receivable Total budgeted collections January $ Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 2 percent. Sales Budget $ Schedule of Cash Receipts $ February $ 10,100 50,500 $ 60,600 10,000 50,000 60,000 January $ < 2 percent January $ 10,000 48,000 $ 58,000 10,000 48,000 58,000 March $ 10,201 51,005 $ 61,206 Growth rate of 2% February March Growth rate of 2% March February 50,000 February $ 10,100 50,000 $ 60,100 4 Percent > March $ 10,201 50,500 $ 60,701

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The management team of Magnificent Modems, Incorporated (MMI) wants to investigate the effect of several different growth rates on sales and cash receipts. Cash sales for the month of January are expected to be $10,000. Credit sales for January are expected to be $50,000. MMI collects 100 percent of credit sales in the month following the month of sale. Assume a beginning balance in accounts receivable of $48,000. Required Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 2 percent and 4 percent. The results at a growth rate of 1 percent are shown as an example. Cash sales Sales on account Total budgeted sales Current cash sales Plus collections from accounts receivable Total budgeted collections 2 percent Sales Budget 4 Percent January $ 210,000 50,000 $ 60,000 Cash sales Sales on account Total budgeted sales Use the following forms, assuming a growth rate of 2 percent and 4 percent: Schedule of Cash Receipts Complete this question by entering your answers in the tabs below. Current cash sales Plus collections from accounts receivable Total budgeted collections $ Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 2 percent. Sales Budget January $ Schedule of Cash Receipts $ January February $ 10,100 50, 500 $ 60,600 10,000 50,000 60,000 $ < 2 percent January $ 10,000 48,000 $ 58,000 10,000 48,000 58,000 March $ 10, 201 51,005 $ 61,206 Growth rate of 2% February March Growth rate of 2% March February 50,000 February $ 10,100 50,000 $ 60,100 4 Percent > March $ 10,201 50,500 $ 60,701
Transcribed Image Text:The management team of Magnificent Modems, Incorporated (MMI) wants to investigate the effect of several different growth rates on sales and cash receipts. Cash sales for the month of January are expected to be $10,000. Credit sales for January are expected to be $50,000. MMI collects 100 percent of credit sales in the month following the month of sale. Assume a beginning balance in accounts receivable of $48,000. Required Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 2 percent and 4 percent. The results at a growth rate of 1 percent are shown as an example. Cash sales Sales on account Total budgeted sales Current cash sales Plus collections from accounts receivable Total budgeted collections 2 percent Sales Budget 4 Percent January $ 210,000 50,000 $ 60,000 Cash sales Sales on account Total budgeted sales Use the following forms, assuming a growth rate of 2 percent and 4 percent: Schedule of Cash Receipts Complete this question by entering your answers in the tabs below. Current cash sales Plus collections from accounts receivable Total budgeted collections $ Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 2 percent. Sales Budget January $ Schedule of Cash Receipts $ January February $ 10,100 50, 500 $ 60,600 10,000 50,000 60,000 $ < 2 percent January $ 10,000 48,000 $ 58,000 10,000 48,000 58,000 March $ 10, 201 51,005 $ 61,206 Growth rate of 2% February March Growth rate of 2% March February 50,000 February $ 10,100 50,000 $ 60,100 4 Percent > March $ 10,201 50,500 $ 60,701
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