Problem:
Roswell Company has budgeted sales revenue as follows for the next 4 months as follows.
|
February
|
$150,000
|
|
March
|
$120,000
|
|
April
|
$105,000
|
|
May
|
$165,000
|
Past experience indicates that 80% of sales each month are on credit and that collection of credit sales occurs as follows: 60% in the month of sale, 35% in the month following the sale, and 3% in the second month following the sale. The other 2% is uncollectible.
Required:
Question: Prepare a schedule which shows expected cash receipts from sales for the month of May.
Note: Be sure to show how you arrived at your answer.