Question

Preparing a financial budget—schedule of cash receipts

Victors expects total sales of \(702,000 for January and \)349,000 for February. Assume that Victor'ssales are collected as follows:

50% in the month of the sale

30% in the month after the sale

16% two months after the sale

4% never collected

November sales totaled \(388,000, and December sales were \)407,000. Prepare a schedule of cash receipts from customers for January and February. Round answers to the nearest dollar.

Short answer

Answer

Total cash receipts from the customers is $535,180 in the month of January and $450,220 in the month of February.

Step-by-step solution

Meaning of schedule of cash receipts

The structure and table formed for measuring the cash balances in the form of gained.

Preparation of schedule of cash receipts

Particulars	January	February
Total budgeted sales	$702,000	$349,000
Cash receipts from customers:
50 % in the month of sale	$351,000	$174,500
30% in the month after sale	$407,000*30% =$122,100	$702,000*30% =$210,600
16% two months after sales	$388,000*16% =$62,080	$407,000*16% =$65,120
Total cash receipts from customers	$535,180	$450,220