ABC Company’s budgeted sales for June, July, and August are 12,000, 16,000, and
ID: 2527485 • Letter: A
Question
ABC Company’s budgeted sales for June, July, and August are 12,000, 16,000, and 14,000 units respectively. The selling price for each unit is $18. Based on past experience, ABC expects that 30% of a month’s sales will be collected in the month of sale, 60% in the following month, and 8% in the second month following the sale. Required: Prepare an analysis of cash receipts from sales for ABC Company for August.
REQUIRED: Calculate the second prior month's sales
a month's sales will be ABC Company's budgeted sales or June, July and August are 12,000, 16,000, and 14,000 units respectively. The selling price for each unit is $18. Based on past exper ence, ABC expects hat 30% o collected in the month of sale, 60% in the following month, and 8% in the second month following the sale. Required: Prepare an analysis of cash receipts from sales for ABC Company for August. July August 16 000 Budgeted sales units Unit selling price Budgeted sales revenuse August collections: 12,000 14,000 18r S 3 S S 216 000 S 288,000S 252 000 S 75 Current month's sales Prior month's sales Second 172,800 prior month's sales Total collections S 248,400Explanation / Answer
Prepare analysis of cash receipt :
June July August Budgeted sales units 12000 16000 14000 Unit selling price 18 18 18 Budgeted Sales revenue 216000 288000 252000 August collection Current month sales 75600 Prior months sales 172800 Second prior month's sale 17280 Total collection 265680