Shadee Corp. expects to sell 630 sun visors in May and 360 in June. Each visor s

Question

Shadee Corp. expects to sell 630 sun visors in May and 360 in June. Each visor sells for $12. Shadee’s beginning and ending finished goods inventories for May are 60 and 60 units, respectively. Ending finished goods inventory for June will be 60 units.

It expects the following unit sales for the third quarter:      

Sixty percent of Shadee’s sales are cash. Of the credit sales, 52 percent is collected in the month of the sale, 39 percent is collected during the following month, and 9 percent is never collected.

Required:

Calculate Shadee’s total cash receipts for August and September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

Explanation / Answer

Calculations Particulars May June July Aug Sep A Sales units 630 360 530 490 450 B Selling price per unit 12 12 12 12 12 C = A x B Total Sales 7560 4320 6360 5880 5400 D = C x 60% Cash Sales 4536 2592 3816 3528 3240 E = C - D Credit Sales 3024 1728 2544 2352 2160 F = E x 52% Collection in month of Sale 1572.48 898.56 1322.88 1223.04 1123.2 G = E of previous month x 39% Collection in the following month 1179.36 673.92 992.16 917.28 H = D + F + G Total Cash receipts 6108 4670 5813 5743 5280

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