The following is the sales budget for Segura, Inc., for the first quarter of 201
ID: 2779093 • Letter: T
Question
The following is the sales budget for Segura, Inc., for the first quarter of 2013: January February March Sales budget $139,000 $156,000 $171,000 Credit sales are collected as follows: 60 percent in the month of the sale 30 percent in the month after the sale 10 percent in the second month after the sale The accounts receivable balance at the end of the previous quarter was $98,000 ($80,400 of which was uncollected December sales). Required: (a) Compute the sales for November. (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Sales $ (b) Compute the sales for December. (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Sales $ (c) Compute the cash collections from sales for each month from January through March. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Cash Collection January $ February $ March $
Explanation / Answer
(a) Sales for November Accounts Receivable as on 31 December 2012 = $ 98,000 Out of this, $ 80,400 was Receivables for December This means that the balance $ 17,600 was pertaining to receivables for November Total 10% of the sales is collected in the second month after the sale Hence, this should be 10% of the total sales for November collectible in January 2013 Therefore, sales for November = $ 17,600/10% = $ 176,000 (b) Sales for December $ 80,400 was pertaining to December receivables This is 40% of total sales for the month (30% due in January and 10% in February) Hence, the sales for December will be $ 80,400 / 40% = $ 201,000 (c) Sales collections in January, February and March 2013 January Collections $ From November Sales 17600 From December Sales 60300 From January Sales 83400 161300 February Collections From December Sales 20100 From January Sales 41700 From February Sales 93600 155400 March Collections From January Sales 13900 From February Sales 46800 From March Sales 102600 163300
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