E22-27 preparing a financial budget- schedule of cash receipts, sensitivity anal

Question

E22-27 preparing a financial budget- schedule of cash receipts, sensitivity analysis
Armand Company projects the following sales for the first three months of the year: $10,600 in January; $12,300 in February; and $12,900 in March. The Company expects 60% of sales to be cash and the remainder on account. Sales on account are collected 50% in the month of the sale and 50% in the following month. The Accounts Receivable account has a zero balance on January 1. Round to the nearest dollar.
1. Prepare a schedule of cash receipts for Armand for January, February, and March. What is the balance in Accounts Receivable on March 31?
1. Feb total cash receipts $11,960
2. Prepare a revised schedule of cash receipts if receipts from sales on account are 60% in the month of the sale, 30% in the month following the sale, and 10% in the second month following the sale. What is the balance in Accounts Receivable on March 31? E22-27 preparing a financial budget- schedule of cash receipts, sensitivity analysis
Armand Company projects the following sales for the first three months of the year: $10,600 in January; $12,300 in February; and $12,900 in March. The Company expects 60% of sales to be cash and the remainder on account. Sales on account are collected 50% in the month of the sale and 50% in the following month. The Accounts Receivable account has a zero balance on January 1. Round to the nearest dollar.
1. Prepare a schedule of cash receipts for Armand for January, February, and March. What is the balance in Accounts Receivable on March 31?
1. Feb total cash receipts $11,960
2. Prepare a revised schedule of cash receipts if receipts from sales on account are 60% in the month of the sale, 30% in the month following the sale, and 10% in the second month following the sale. What is the balance in Accounts Receivable on March 31?
Armand Company projects the following sales for the first three months of the year: $10,600 in January; $12,300 in February; and $12,900 in March. The Company expects 60% of sales to be cash and the remainder on account. Sales on account are collected 50% in the month of the sale and 50% in the following month. The Accounts Receivable account has a zero balance on January 1. Round to the nearest dollar.
1. Prepare a schedule of cash receipts for Armand for January, February, and March. What is the balance in Accounts Receivable on March 31?
1. Feb total cash receipts $11,960
2. Prepare a revised schedule of cash receipts if receipts from sales on account are 60% in the month of the sale, 30% in the month following the sale, and 10% in the second month following the sale. What is the balance in Accounts Receivable on March 31?

Explanation / Answer

1 $ Financial Budget Particulars January February March Opening Cash 0 8480 32400 Cash Sales 6360 7380 7740 Sale on Account 2120 2460 2580 Sale on Account of Jan 0 2120 0 Cash Receipts 0 11960 0 Sale on Account of Feb 0 0 2460 Closing Balance 8480 32400 45180 The balance in Accounts Receivable on March 31 is 2580 2 Financial Budget $ Particulars January February March Opening Cash 0 8904 32468 Cash Sales 6360 7380 7740 Sale on Account 2544 2952 3096 Sale on Account of Jan 0 1272 424 Cash Receipts 0 11960 0 Sale on Account of Feb 0 0 1476 Closing Balance 8904 32468 45204 The balance in Accounts Receivable on March 31 is 2556 12900*16% 12300*4%

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