Crew Clothing (CC) sells women\'s resort casual clothing to high-end department

Question

Crew Clothing (CC) sells women's resort casual clothing to high-end department stores and in its own retail boutiques. CC expects sales for January, February, and March to be S420,000, $480,000, and S500,000, respectively. Twenty percent of CC's sales are cash, with the remainder collected evenly over two months. During December, CC's total sales were $730,000. CC is beginning its budget process and has asked for your help in preparing the cash budget. Compute CC's expected cash receipts from customers for each month. January February March Budgeted Cash Receipts

Explanation / Answer

Budgeted cash receipts: January 544000 =(420000*20%)+(420000*80%*50%)+(730000*80%*50%) February 456000 =(480000*20%)+(420000*80%*50%)+(480000*80%*50%) March 492000 =(500000*20%)+(500000*80%*50%)+(480000*80%*50%)

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