Asked by Angelica Renata on Apr 25, 2024
Casa Development Inc. has budgeted sales revenues as follows: Budgeted Sales Revenues January $55,000 February 75,000 March 90,000 April 80,000 May 60,000 June 35,000\begin{array} { l c } & \text { Budgeted Sales Revenues } \\\text { January } & \$ 55,000 \\\text { February } & 75,000 \\\text { March } & 90,000 \\\text { April } & 80,000 \\\text { May } & 60,000 \\\text { June } & 35,000\end{array} January February March April May June Budgeted Sales Revenues $55,00075,00090,00080,00060,00035,000 Past experience has indicated that 80% of sales each month are on credit and that collection of credit sales occurs as follows: 60% in the month of sale 30% in the month following the sale and 5% in the second month following the sale. The other 5% is uncollectible.
Instructions
Prepare a schedule which shows expected cash receipts from sales for the months of April May and June.
Credit Sales
Transactions where goods or services are provided to a customer with the agreement that payment will be made at a later date.
Uncollectible
Refers to accounts receivable that are considered to be uncollectable and are thus written off as a bad debt expense.
Cash Receipts
The collection of money (currency, checks, wire transfers) by a business from its customers or other parties.
- Study and establish cash budget plans, integrating expected cash receipts and outflows.
- Grasp the methods for estimating collections from sales and payments for expenses, including the timing and amounts.
Learning Objectives
- Study and establish cash budget plans, integrating expected cash receipts and outflows.
- Grasp the methods for estimating collections from sales and payments for expenses, including the timing and amounts.