Meredith Company has budgeted sales for the upcoming months as follows: April $
ID: 2467234 • Letter: M
Question
Meredith Company has budgeted sales for the upcoming months as follows: April $ 452,000 May $ 466,000 June $ 495,000 July $ 524,000 August $ 509,000 September $ 476,000
40% of the sales are credit sales, the remainder are cash sales. Credit sales are collected 45% in the month of sale, 35% in the month following the sale, and 6% in the second month following the sale.
Compute Meredith Company’s cash receipts for June. (Do not round intermediate calculations.)
40% of the sales are credit sales, the remainder are cash sales. Credit sales are collected 45% in the month of sale, 35% in the month following the sale, and 6% in the second month following the sale.
Explanation / Answer
cash receipts for June.=
Cash sales=495,000*60%=$297,000
in the month of sale=495,000*40%*45%=$89,100
in the month following the sale=466,000*40%*35%=$65,240
in the second month following the sale=452,000*40%*6%=10,848
Company’s cash receipts for June.=$462,188