Frank\'s Sporting Goods projects sales for the second quarter of 20XX to be as f

Question

Frank's Sporting Goods projects sales for the second quarter of 20XX to be as follows:
April $100,000 May $120,000 June $110,000
20% of Frank's sales are for cash, 70% of accounts receivable are collected one month following the sale, and the rest are collected two months following the sale. January sales were $40,000, February sales were $60,000, and March sales were $80,000.
a) Prepare a monthly schedule of cash receipts for the second quarter of 20XX.
b) What is the balance in accounts receivable at the end of June?

Explanation / Answer

a)

Note :

b)

Sales Of May = $ 120,000

Credit Sales = $ 96,000

Realised in June out of Credit Sales= $ 67,200

Due on June = $ 96,000 - $ 67,200

= $ 28,800

Sales Of June= $ 110,000

Credit Sales = $ 88,000

Realised in June out of Credit Sales= Nil

Due on June = $ 88,000

Total Due in June = $ 88,000 + $ 28,800

= $ 116,800

Hence the correct answer is $ 116,800

Schedule of  cash receipts April May   June Sales 1,00,000 1,20,000 1,10,000 Cash Sales ( 20%) 20,000 24,000 22,000 Credit Sales ( 80%) 80,000 96,000 88,000 Receipts of Credit Sales: 1. 70% of credit Sales in following Month 44,800 56,000 67,200 3. 30% of credit Sales in 2 Months following Month of Sales 14,400 19,200 24,000 Cash Receipts From Credit Sales 59,200 75,200 91,200 Add: Cash Receipts From Cash Sales 20,000 24,000 22,000 Budgeted Cash Receipts 79,200 99,200 1,13,200

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.