Sipacore Retailers expects credit sales in the next quarter as follows: Apri $96

Question

Sipacore Retailers expects credit sales in the next quarter as follows: Apri $96,100 May 86,500 June 109,000 Prior experience has shown that 65 percent of a month's sales are collected in the month of sale, 16 percent are collected in the month following sale, and the remaining 19 percent are collected in the second month following sale. February and March sales were $88,800 and $100,000, respectively. Estimate budgeted cash receipts for April, May, and June. Collection of credit sales April May June Collection of February sales s Collection of March sales Collection of April sales Collection of May sales Collection of June sales

Explanation / Answer

Note :

1. For the month of February : 65% is collected in February, 16% in March and 19% in April.

2. For the month of March : 65% is collected in March, 16% in April and 19% in May

3. For the month of April : 65% is collected in April, 16% in May and 19% in June

4. For the month of May : 65% is collected in May, 16% in June and 19% in July

5. For the month of June : 65% is collected in June , 16% in July and 19% in August

Collection of Credit sales April May June Collection of February Sales 16,872 -    -    Collection of March Sales 16,000 19,000 -    Collection of April Sales 62,465 15,376 18,259 Collection of May Sales -    56,225 13,840 Collection of June Sales -    -    70,850 95,337 90,601 102,949

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