Question

DeBerg Company has the following sales projections for its second and third quarters:

April $100,000
May $120,000
June $140,000
July $160,000
August $150,000
September $130,000

Normal cash collection experience has been that 50% of sales are collected during the month of sale, 30% in the month following sale, and 15% in the second month following sale. The remaining 5% of sales is never collected.

Prepare the schedule of cash collections for the third quarter, by month and in total.

Cash Collection Schedule

Jul.

Aug.

Sep.

3rd Qtr
Total planned sales

$


$


$


$


Credit sales collected during month







$


Credit sales collected one month later







$


Credit sales collected two months later







$


$


$


$


$

Answer 1

the collections for the third quarter are 415.000 (July 140.000, August 144.000 and September 134.000)

Step-by-step explanation:

In this case you just have to create a a table that includes the formula for each scenario month by month

April May June July August September October November

April 100,000.00 50,000.00 30,000.00 15,000.00

May 120,000.00 60,000.00 36,000.00 18,000.00

June 140,000.00 70,000.00 42,000.00 21,000.00

July 160,000.00 80,000.00 48,000.00 24,000.00

August 150,000.00 75,000.00 45,000.00 22,500.00

September 130,000.00 65,000.00 39,000.00 19,500.00

50,000.00 90,000.00 121,000.00 140,000.00 144,000.00 134,000.00 61,500.00 19,500.00