Question

Liza’s predicts sales of $40,000 for May and $52,000 for June. Assume 60% of Liza’s sales are for cash. The remaining 40% are credit sales; credit customers pay in the month following the sale. Compute the budgeted cash receipts for June.

Answer 1

$47,200

Step-by-step explanation:

Given that,

Sales in May = $40,000

Sales in June = $52,000

Cash sales = 60% of total sales

Credit sales = 40% of total sales (it will be paid in the month following the sale)

Cash sales for June:

= Budgeted sales - Ending accounts receivable

= $52,000 - (40% of $52,000)

= $52,000 - $20,800

= $31,200

Total Budgeted cash receipts for June:

= Cash sales for June + Collection of last months receivables(May credit sales)

= $31,200 + (40% of $40,000)

= $31,200 + $16,000

= $47,200