The Coffe House, Inc. makes all of its sales on account. The firms\' collection

Question

The Coffe House, Inc. makes all of its sales on account. The firms' collection experience has been that 25% percent of the months's sales are collectected in the month of the sale,

60 percent are collected in themonth following the sale, and 12 percent are collected in the second monht following the sale. The sales forecase for the months of March throught June is:

March        65,000

April            72,000

May             58,000

June             61,000

Calculate the cash collections that would be included in the cash budgets for May and June

Explanation / Answer

Particulars Mar Apr May Jun Sales 65000 72000 58000 61000 same month collection 16250 18000 14500 15250 Mar Sales @60% 9750 Mar Sales @12% 1950 Apr Sales @60% 10800 Apr Sales @12% 2160 May Sales @60% 8700 Total Cash collections 16250 27750 27250 26110

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