New 661 - 30 45 25 February Sales 30 45 25 March Sales 30...

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Question: Detmer Enterprises has budgeted sales for the next four months as follows: Budgeted Sales in Units January 7,400 units February 5,300 units March 3,900 units April ????? units Detmer's product sells for $20 each. Experience has shown that 10% of the company's sales are cash sales and 90% of the company's sales are made on account. The sales on account are collected in the pattern 30% in the month of sale, 45% in the month following sale, and 25% is collected in the second month following sale. Detmer's pro forma balance sheet at April 30 reported a budgeted accounts receivable balance of $104,490. Calculate the number of units budgeted to be sold in April . Do not use decimals or the $ in your answer. Additionally, do not type the word units after your answer. Answer: January February March April A Sales units 7400 5300 3900 X B Selling perice per unit 20 20 20 20 C = A x B Total Sales 148000 106000 78000 20X D = C x 10% Less: Cash Sales 14800 10600 7800 2X E = C - D Credit Sales 133200 95400 70200 18X January Sales
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Unformatted text preview: 30% 45% 25% February Sales 30% 45% 25% March Sales 30% 45% April Sales 30% Let the Sales units of April be X. So, Credit Sales of April = 18X The credit Sales made in January will be collected in January, February and March. The credit Sales made in February will be collected in February, March and April. (30 + 45)% of credit sales of march will be collected by April and 25% will be remaining as receivables in April. So,receivables of march pending in april closing balance = March Credit Sales x 25% = $70,200 x 25% = $17,550 and 30% of credit sales of april will be collected by April and 70% will be remaining as receivables in April. So,receivables of april pending in april closing balance = April Credit Sales x 70% = 18 X x 70% = 12.60 X. So, March + April remaining balance = $104,490 So, $17,550 + 12.60 X = $104,490 So, X = $86,940 / 12.60 = 6,900 units. So, number of units budgeted to be sold in April = 6,900 units....
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