Question

Jasper Company has sales on account and for cash. Specifically, 61% of its sales are on account and 39% are for cash. Credit sales are collected in full in the month following the sale. The company forecasts sales of $530,000 for April, $540,000 for May, and $565,000 for June. The beginning balance of Accounts Receivable is $301,100 on April 1. Prepare a schedule of budgeted cash receipts for April, May, and June.

Answer 1

Answer and Explanation:

As per the data given in the question,

Particulars                              April                 May                           June

Cash sales (Total × 39%)      $206,700         $210,600               $220,350

Sales on account (Total × 61%) $323,300     $329,400              $344,650

Total sales                              $530,000        $540,000              $565,000

                                            Jasper Company

                                          Cash receipts budget

                                         For April, May and June

Particulars                             April                   May                               June

Cash receipts from :

Cash sales                           $206,700           $210,600                     $220,350

Accumulation of

accounts receivable           $301,110              $323,300                     $329,000

                         (account receivable Apr-1) (April sale on account) (May sale on account)

Total cash receipt               $507,810            $533,900                   $549,350

We simply added the cash balance and the accumulation of the account receivable so that the total cash receipts could come