Budgeted Cash Receipts The Fresh Company is preparing its cash budget for the mo
ID: 2572867 • Letter: B
Question
Budgeted Cash Receipts
The Fresh Company is preparing its cash budget for the month of May. The following information is available concerning its accounts receivable:
Estimated credit sales for May..............................................................$200,000
Actual credit sales for April....................................................................$150,000
Estimated collections in May for credit sales in May.............................$20%
Estimated collections in May for credit sales in April.............................70%
Estimated collections in May for credit sales prior to April.....................$12,000
Estimated write-offs in May for uncollectable credit sales......................$8,000
Estimated provision for bad debts in May for credit sales in May...........$7,000
Compute the estimated cash receipts from accounts receivable collections in May.
A detailed walk-through on how to calculate the required answer would be super helpful! Not sure where to start, and we can't use computer programs like Excel so a traditional means of solving would be much appreciated.
Explanation / Answer
Compute the estimated cash receipts from accounts receivable collections in May.
Amount
Estimated collections in May for credit sales in May
May month sales = $200,000
Cash receipt = $200,000*20%
$40,000
Estimated collections in May for credit sales in April
April month sales = $150,000
Cash receipt = $150,000*70%
$105,000
Estimated collections in May for credit sales prior to April
$12,000
Total Cash collection in May from accounts receivables
$157,000
Ans) Cash collection =$157,000
Compute the estimated cash receipts from accounts receivable collections in May.
Amount
Estimated collections in May for credit sales in May
May month sales = $200,000
Cash receipt = $200,000*20%
$40,000
Estimated collections in May for credit sales in April
April month sales = $150,000
Cash receipt = $150,000*70%
$105,000
Estimated collections in May for credit sales prior to April
$12,000
Total Cash collection in May from accounts receivables
$157,000
Ans) Cash collection =$157,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.