Barrera’s Outdoor Outfitters sells many items that sporting enthusiasts find use

Question

Barrera’s Outdoor Outfitters sells many items that sporting enthusiasts find useful. The company sells shoes, pants, shirts, jackets, fly-fishing equipment, hiking equipment, hunting equipment, and various other products.

The following sales projections were prepared by the company’s sales manager and include all items for each of the first seven months of 2012: Month Sales Volume Month Sales Volume January 25,000 May 31,400 February 27,000 June 34,500 March 32,000 July 36,700 April 28,500 The average sales price per item is $12. The company estimates that it collects 70 percent of each month’s sales in the month of sale and 20 percent the following month. The remaining outstanding sales are collected in the next month. The balance of accounts receivable on December 31, 2011, was $141,600. Of the accounts receivable balance, $33,600 represents uncollected November sales.

Prepare a cash receipts budget for January through June of 2012.

Explanation / Answer

Closing Accounts Receivable = 41400 from june + 132120 from july

## Opening AR = 141600

November month balance in above is 33600 so, December balance is 141600- 33600 = 108000

this 108000 represents 30% of December's Sale out of this 108000 we will receive 20/30 in Jan and 10/30 in February

CASH BUDGET Jan    Feb March April May June July Add: Budgeted cash receipts 33600+72000+210000 36000+60000+226800 30000+64800+268800 32400+76800+239400 38400+68400+263760 34200+75360+289800 37680+82800+308280 315600 322800 363600 348600 370560 399360 428760

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.