Question

Augustine ​Reeds, a manufacturer of​ saxophone, oboe, and clarinet​ reeds, has projected sales to be $ 904 comma 000 in​ October, $ 964 comma 000 in​ November, $ 1 comma 045 comma 000 in​ December, and $ 936 comma 000 in January. Augustine​'s sales are 20​% cash and 80​% credit. The​ company's collection history indicates that credit sales are collected as​ follows: 30% in the month of the sale 60% in the month after the sale 8% two months after the sale 2% are never collected Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instruction tab you will be marked wrong. Requirements 1 Prepare a sales budget for all four months, showing the breakdown between cash and credit sales. 2 Prepare a cash collections budget for December and January. a. Use cell references from the prior requirement, if applicable.

Answer 1

1. Sales Budget

October November December January

Total Sales $ 904,000 $ 964,000 $1,045,000 $ 936,000

Cash Sales - 20 $180,800 $192,800 $209,000 $187,200

Credit Sales - 80%$723,200 $771,200 $836,000 $748,800

2.Cash collections budget

December January

Cash Sales $209,000 $187,200

Credit Sales - 30% (0) $250,800 $224,640

Credit Sales - 60% (1) $462,720 $501,600

Credit Sales - 8% (2) $ 57,856 $ 61,696

Total $980,376 $975,136

Step-by-step explanation:

1. Sales Budget

The Budget shows Both Cash and Credit Sales expected by the firm

2.Cash collections budget

Include Cash collections from both Cash and Credit Sales (as appropriate)