4.00 points out of 4.00
The sales budget for Perrier Inc. is forecasted as follows:
To prepare a cash budget, the company must determine the budgeted cash collections from
sales. Historically, the following trend has been established regarding cash collection of sales:
50 percent in the month of sale.
25 percent in the month following sale.
20 percent in the second month following sale.
5 percent uncollectible.
The company gives a 2 percent cash discount for payments made by customers during the month
of sale. The accounts receivable balance on April 30 is $24,000, of which $7,000 represents
uncollected March sales and $17,000 represents uncollected April sales.
Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a
three-month summary of estimated cash collections.
Schedule of Budgeted Cash Collections
Quarterly by Months
Total Cash receipts:
Marks for this submission: 4.00/4.00.