Crew Clothing (CC) sells women’s resort casual clothing to high-end department s
ID: 2527934 • Letter: C
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 $470,000, $530,000, and $550,000, respectively. Twenty percent of CC’s sales are cash, with the remainder collected evenly over two months. During December, CC’s total sales were $780,000. 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.
Explanation / Answer
Answers
50% of credit sale is collected in month of sale, 50% in following month.
December
January
February
March
Sales
$ 7,80,000.00
$ 4,70,000.00
$ 5,30,000.00
$ 5,50,000.00
Cash sale 20%
$ 1,56,000.00
$ 94,000.00
$ 1,06,000.00
$ 1,10,000.00
Credit Sale 80%
$ 6,24,000.00
$ 3,76,000.00
$ 4,24,000.00
$ 4,40,000.00
50% of credit sale
$ 3,12,000.00
$ 1,88,000.00
$ 2,12,000.00
$ 2,20,000.00
January
February
March
Cash Sale for the month
$ 94,000.00
$ 1,06,000.00
$ 1,10,000.00
Add: Cash collected for credit sale happened in:
December
$ 3,12,000.00
January
$ 1,88,000.00
$ 1,88,000.00
February
$ 2,12,000.00
$ 2,12,000.00
March
$ 2,20,000.00
Total cash collected
$ 5,94,000.00
$ 5,06,000.00
$ 5,42,000.00
December
January
February
March
Sales
$ 7,80,000.00
$ 4,70,000.00
$ 5,30,000.00
$ 5,50,000.00
Cash sale 20%
$ 1,56,000.00
$ 94,000.00
$ 1,06,000.00
$ 1,10,000.00
Credit Sale 80%
$ 6,24,000.00
$ 3,76,000.00
$ 4,24,000.00
$ 4,40,000.00
50% of credit sale
$ 3,12,000.00
$ 1,88,000.00
$ 2,12,000.00
$ 2,20,000.00
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