Mississippi Retailers expects credit sales in the next quarter as follows: Prior
ID: 2451236 • Letter: M
Question
Mississippi Retailers expects credit sales in the next quarter as follows:
Prior experience has shown that 68 percent of a month’s sales are collected in the month of sale, 17 percent are collected in the month following sale, and the remaining 15 percent are collected in the second month following sale. February and March sales were $95,300 and $104,000, respectively.
Estimate budgeted cash receipts for April,May, and June.
Collection of credit sales
April
May
June
Collection of February sales
Collection of March sales
Collection of April sales
Collection of May sales
Collection of June sales
April $68,000 May 84,400 June 106,000Explanation / Answer
Collection of credit sales
April=15 % of 95300 + 17 % of 104000 + 68 % of 68000 =78215
May=15 % 104000 + 17% of 68000 + 68% of 84400 =84552
June=15% of 68000 + 17% of 84400 + 68% of 106000 =96628