Chapter 9 – Assigned Problem 2 XYZ Company usually sells about 40% of its mercha
ID: 2609255 • Letter: C
Question
Chapter 9 – Assigned Problem 2
XYZ Company usually sells about 40% of its merchandise during a month for cash, 40% collected in the month after sale, and 10% in two months after the sale – 10% of the sales are never collected. Total budgeted sales for the second quarter are as follows:
April
$200,000
May
100,000
June
150,000
Assume all questions relate to the month of June.
1.
What are the expected receipts in June from accounts receivable for sales made in April?
2.
What are the expected receipts in June from accounts receivable for sales made in May?
3.
What are the total expected cash receipts in June?
April
$200,000
May
100,000
June
150,000
Explanation / Answer
1. Expected Receipts in june from accounts receivable for sales made in April = (200000*10%) = 20000
2. expected receipts in June from accounts receivable for sales made in May = (100000*40%) = 40000
3. total expected cash receipts in June = (150000*40%)+40000+20000 = 120000