Reference no: EM133187770
Question - Fancy Bikes, a supplier of sports bikes, estimates that in July, August and September of 2022, the number of bicycles to be sold are 2,500, 3,000 and 2,800 respectively. Each bike sells for $275. Based on historical records, cash sales in a given month averages 30%. For the sales on credit, the collection is normally as follows:
15% received in the month of the sale
65% received in the month after the sale
13% received two months after the sale
7% of the credit sales are never received
May and June 2022's credit sales are $600,000 and 650,000 respectively.
Required -
1. Prepare a sales budget for the third quarter of 2022 with totals for the quarter.
2. Prepare a cash collection budget for the third quarter of 2022, with totals for the quarter.