Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 6, Problem 20P
Eastern Auto Parts Inc. has 15 percent of its sales paid for in cash and 85 percent on credit. All credit accounts are collected in the following month. Assume the following sales:
Sales in December of the prior year were
Prepare a cash receipts schedule for January through April.
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Marlin Company projects the follwoing sales for the first thre months of the year: $11500 in January; $10100 in February and $10400 in March. the company expects 60% of the sales to be cash and the remainder on accounts. Sales on account are collected 50% in the month of the sale and 50% in the following month. The Account Receivable account has a zero on January.
1. Prepare a schedule of cash receipts for Marlin for January, February and March. What is the balance in Accounts Receivable on March 31?
2. Prepare a revised schedule of cash receipts if receipts from sales on account are 70% in the month of the sale, 20% in the following month of the sale and 10% in the second month of the sale. What is the balance in Accounts Receivable on March 31?
Eastern Auto Parts Incorporated has 20 percent of its sales paid for in cash and 80 percent on credit. All credit accounts are collected in the following month.
Assume the following sales:
January
$ 82,000
February
72,000
March
117,000
April
62,000
Sales in December of the prior year were $92,000.
Prepare a cash receipts schedule for January through April.
Jasper Company has 62% of its sales on credit and 38% for cash. All credit sales are collected in full in the first month following the
sale. The company budgets sales of $522,000 for April, $532,000 for May, and $557,000 for June. Total sales for March are
$304,900.
Prepare a schedule of cash receipts from sales for April, May, and June.
Sales
Cash receipts from:
Accounts receivable
Total cash receipts
JASPER COMPANY
Schedule of Cash Receipts from Sales
April
522,000
May
532,000
June
557,000
Chapter 6 Solutions
Foundations of Financial Management
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