Anonymous
Anonymous asked in Business & FinanceOther - Business & Finance · 1 decade ago

Someone please help me with this simple cash budget question...I cannot get it right!?

Johnson, Inc., found that about 10 percent of its sales during the month were for cash. Johnson has the following accounts receivable payment experience:

Percent paid in the month of sale 30%

Percent paid in the month after sale 60%

Percent paid in the second month after sale 7%

Johnson's anticipated sales for the next few months are as follows:

April $200,000

May 240,000

June 230000

July 246000

August 250000

1. Calculate credit sales for May, June, July, and August.

May $216000 (this is correct)

June ?

July ?

August ?

2. Prepare a schedule of cash receipts for July and August. If no entry is required, leave the answer box blank (or answer "0").

Johnson, Inc.

Schedule of Cash Receipts

For July and August

July August

Cash sales ? ?

Payments on account:

From May credit sales ? 0(correct)

From June credit sales ? ?

From July credit sales ? ?

From August credit sales $0 (correct) ?

Cash receipts ? ?

I know I must be making this harder than it is, but I absolutely cannot figure it out. Any place that there is a question mark is where I need an answer and any help whatsoever would be greatly appreciated:)

1 Answer

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  • 1 decade ago
    Favorite Answer

    Calculate credit sales for May, June, July, and August.

    sales 240000 230000 246000 250000

    cash sales 24000 23000 24600 25000

    credit sales 216000 207000 221400 225000

    ======================

    May June July Aug

    sales 240000 230000 246000 250000

    cash sales 24000 23000 24600 25000

    credit sales216000 207000 221400 225000

    paid 30% 64800 62100 66420 67500

    paid 60% 129600 124200 132840 135000

    paid 7% 15120 14490 15498 15750

    july receipts...add

    15120 +124200+66420

    august receipts ...add

    14490+132840+67500

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