Reference no: EM132505130

Cash Receipts

The sales budget for Perrier Inc. is forecasted as follows:

Month          Sales Revenue

May              $130,000

June 1            50,000

July              200,000

August             130,000

For a cash budget, the company must determine the budgeted cash collections from sales. Historically, the following trend has been established regarding cash collection of sales:

1. 60 percent in the month of sale.
2. 20 percent in the month following sale.
3. 15 percent in the second month following sale.
4. 5 percent uncollectible.

Question 1: The company gives a 2 percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $22,000, of which $7,000 represents uncollected March sales and $15,000 represents uncollected April sales. How do I complete a schedule of budgeted cash collections from sales for May, June, and July. Include a three-month summary of estimated cash collections?