Trever Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $898,000 in October, $964,000 in November, $1,030,000 in December, and $920,000 in January. Trever's sales are 30% cash and 70% 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 14% two months after the sale 1% are never collected Requirements 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales. 2. Prepare a cash collection budget for December and January. Round all answers up to the nearest dollar.
Trever Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $898,000 in October, $964,000 in November, $1,030,000 in December, and $920,000 in January. Trever's sales are 30% cash and 70% 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 14% two months after the sale 1% are never collected Requirements 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales. 2. Prepare a cash collection budget for December and January. Round all answers up to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Trever Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $898,000 in October, $964,000 in November, $1,030,000
in December, and $920,000 in January. Trever's sales are 30% cash and 70% 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
14% two months after the sale
1% are never collected
Requirements
1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales.
2. Prepare a cash collection budget for December and January. Round all answers up to the nearest dollar.
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