Assume Gable\'s has the following budgeted sales for the quarter: ?(Click the ic

Question

Assume Gable's has the following budgeted sales for the quarter: ?(Click the icon to view the sales data.) Determine Gable's budget for March cash collections assuming credit sales are collected as follows: 90% is collected the month after sale, 9% is collected two months after the month of sale, and 1% is never collected. Complete the cash budget to determine how much cash will be collected in March. Gable's Cash Collections Budget For the Month of March Cash sales in current month Collections on credit sales: 90% of credit sales made last month 9% of credit sales made t'wo months ago Total cash collections Enter any number in the edit f

Explanation / Answer

Gable's Cash Collection Budget For the Month of March Cash Sales in current month $       11,000 Collection on credit sales: 90% of credit sales made last month $       90,000 9% of credit sales made two months ago $         9,000 Total cash collection $   1,10,000 Working: March 90% of credit sales made last month        1,00,000 x 90% =      90,000 9% of credit sales made two months ago        1,00,000 x 9% =         9,000

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