Budgeted sales revenue for the coming five months is as follows: You estimate th

Question

Budgeted sales revenue for the coming five months is as follows:

You estimate that you will collect 30% of sales revenue in the month of sale, 30% in the following month, 35% two months after the sale, and the remaining 5% three months after the sale.

Required:

Compute budgeted cash inflows for November and December.
   November = $  
   December = $  
(Hint: pay attention to the timing, e.g. "30% is collected in the following month" means 30% of August revenue is collected in September, i.e., cash receipts (inflows) for September include 30% of previous month's sales revenue.)

Month Sales revenue August $160,000 September $105,000 October $200,000 November $145,000 December $155,000

Explanation / Answer

Amount in $

particulars November December Sale realize in same month 30% 43,500 46,500 sale realize in following month 30% 60,000 43,500 sale realize in after 2 months 35% 52,500 70,000 sale realize after 3 months 5% 8,000 5,250 total cash receipts 164,000 165,250

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