Haas Company is a retail company that specializes in selling outdoor camping equ

Question

Haas Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, 2015. The company president formed a planning committee to prepare a master budget for the first three months of operation. As budget coordinator, you have been assigned the following tasks. Required a. & b. October sales are estimated to be $300,000, of which 40 percent will be cash and 60 percent will be credit. The company expects sales to increase at the rate of 20 percent per month. The company expects to collect 100 percent of the accounts receivable generated by credit sales in the month following the sale. Prepare a sales budget and a schedule of cash receipts.

                                         October               November              December

Sales Budget

        Cash Sales

        Sales on Account

        Total Budgeted Sales

Schedule of Cash Receipts

       Current Cash Sales

       Plus collections from A/R

       Total Collections

Explanation / Answer

Particulars October   November December Sales            300,000.00           360,000.00           432,000.00 Cash Sales @40%            120,000.00           144,000.00           172,800.00 Sales on Account @60%            180,000.00           216,000.00           259,200.00 Total Budgeted Sales            300,000.00           360,000.00           432,000.00 Schedule of Cash Receipts Current Cash Sales            120,000.00           144,000.00           172,800.00 Collection of Accounts Receivable in next month           180,000.00           216,000.00 Total Collections            120,000.00           324,000.00           388,800.00

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