Question

Day Company has the following sales budget: July August September $105,000 $211,000 $134,000 Credit sales represent 80 percent of budgeted sales. Of the credit sales, 20 percent is collected in the month of the sale, 60 percent in the month after the sale, and the remaining 15 percent is collected two months after the sale. Five percent of all sales are uncollectible and written-off. In September, total cash receipts from sales amount to

Answer 1

Day Company

In September, total cash receipts from sales amount to:

= $162,080.

Step-by-step explanation:

a) Data and Calculations:

sales budget: Credit (80%) Cash (20%)

July $105,000 $84,000 $21,000

August $211,000 $168,800 $42,200

September $134,000 $107,200 $26,800

July August September

Sales $105,000 $211,000 $134,000

Credit sales 84,000 168,800 107,200

Cash sales 21,000 42,200 $26,800

20% 16,800 33,750 21,400

60% after sales 50,400 101,280

15% after 2 months 12,600

Total cash receipts from sales $162,080