Concept explainers
Budget: It is forward looking exercise which the company takes by preparing estimated revenues, costs and resources needed by company for a period. It can be prepared for single period or for multiple periods
The estimated cash receipts of sales for the month of September, October and November
The estimated cash receipts of sales for the month of September, October and Novemberis given below
The following information is required to calculate cash receipts of sales for the month of September, October and November
- The sales amount for the month of July, august, September, October, November and December is $98,000, $105,000, $114,000, $94,000, $122,000 and $107,000
- The cash collection of sales are 30% of sales amount on the month of sales, the following month 55% will be collected and 10% the following month means the sales amount of July of $98,000 will be collected as follows
- 30% of $98,000 will be collected in July
- 55% of $98,000 will be collected in August
- 10% of $98,000 will be collected in September
The cash receipt of sales amount from July, August, September, October and November is calculated as under
The total cash receipts for the month of September, October and November is $101,750, $101,400 and $99,700 respectively
The total cash receipts for the month of September, October and November is $101,750, $101,400 and $99,700 respectively

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Chapter 14 Solutions
Accounting: What the Numbers Mean
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