Question

Jasper Company has sales on account and for cash. Specifically, 70% of its sales are on account and 30% are for cash. Credit sales are collected in full in the month following the sale. The company forecasts sales of $525,000 for April, $535,000 for May, and $560,000 for June. The beginning balance of Accounts of $525,000 for Apri, $535,000 for May, and $560,000 for June. The beginning balance of Accounts Receivable is $400,000 on April 1
Prepare a schedule of budgeted cash receipts for April, May, and June Answer is complete but not entirely correct. April May Jur 30% |$ 157,500 $ 160,5000$ 70% Cash sales 374,500 535,000 5 Sales on account 367,500 Total sales $ 525,000 $ JASPER COMPANY Cash Receipts Budget For April, May, and June

Answer 1

Answer:

Jasper Company

Cash Receipts Budget for April, May, and June:

                                        April             May              June               Total

Cash Sales 30%         $157,500      $160,500      $168,000        $486,000

Credit Sales 70%         400,000       367,500        374,500         1,142,000

Total                           $557,500    $528,000     $542,500     $1,628,000

Explanation:

1. Cash Receipts Budget shows the estimated cash receipts from customers and other sources.

2. Calculations:

a) Cash Sales for April = 30% of April Sales = 30% * $525,000 = $157,500.  The difference of 70% is received in May.

b) Sales received on account for April = 100% of Accounts Receivable = $400,000.

c) Cash Sales for May = 30% of April Sales = 30% * $535,000 = $160,500.  The difference of 70% is received in June.

d) Cash Sales for June = 30% of April Sales = 30% * $560,000 = $168,000.  The difference of 70% is received in July.