SOLUTION FOR SHORT CASH RECEIPTS BUDGETING EXERCISE

SOLUTION FOR SHORT CASH RECEIPTS BUDGETING EXERCISE -...

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SOLUTION FOR SHORT CASH RECEIPTS BUDGETING EXERCISE Lets see if we can apply methods in the text to create the cash receipts part of the budget: Using the example on page 80 of your text with different \$ amounts, Bieber's Machine Parts has budgeted credit sales for April - June of \$500, \$600 and \$700, and credit sales are collected as follows: 20% in the month of sale, 60% in the month following sale, 17% in the second month following sale, with the remaining 3% being uncollectible. 1. In the month of June how much are Bieber's budgeted monthly cash receipts? Please show your calculations to get to the total by month. June Cash Receipts From Apr credit sales ........ \$500 x 17% = \$85 From May credit sales ....... \$600 x 60% = \$360 From Jun credit sales ........ \$700 x 20% = \$140 ...... Total .................................................. = \$585 2. If Bieber's also has budgeted cash sales for June of \$150, how much now are Bieber's June monthly cash receipts? June Cash Receipts From credit sales ................................. = \$585 From cash sales ................................. = \$150 ...... Total ........................ .................... = \$735 3. Bieber's charges bad debt expense to General and Administrative, so in what month do you think it will budget bad debt pertaining to April and May sales?
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