a firms actual sales of $64,000 in april and 63,000 in may. It expects sales of

Question

a firms actual sales of $64,000 in april and 63,000 in may. It expects sales of 73,000 in june and 105,000 in July and in August assuming that sales are the only source of cash inflows and that half of them are for cash and the remainder are collected evenly over the following 2 months what are the firms expected cash receipts for June, July, and August. What are the cash sale for April - August? What are the collections for May-Aug? What are the Lag month 1 amounts for may-Aug? What are the lag 2 months amounts for Jun-Aug? what are the total cash receipts for June-Aug

Explanation / Answer

1)

2)

3)

Total collection= 126250

4)lag one amount = 16000+ 15750+18250+ 26250 = 76250

5)Lag two amount = 16000+15750+18250=50000

6)Total cash receipts = 68250+86500+97000=251750

June July August cash sales 36500     [73000*1/2] 52500    [105000/2] 52500 credit sales April sales 16000      [64000*1/2 *1/2] May sales 15750      [63000*1/2*1/2] 15750 june sales 18250    [73000*1/2*1/2] 18250 July sales 26250   [105000*1/2*1/2] Total cash receipts 68250 86500 97000

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