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1 March, 16:06

Casa Development, Inc. has budgeted sales revenues as follows: Budgeted Sales Revenues January $55,000 February 75,000 March 90,000 April 80,000 May 60,000 June 35,000 Past experience has indicated that 80% of sales each month are on credit and that collection of credit sales occurs as follows: 60% in the month of sale, 30% in the month following the sale, and 5% in the second month following the sale. The other 5% is uncollectible. Prepare a schedule which shows expected cash receipts from sales for the months of April, May, and June.

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  1. 1 March, 16:30
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    Expected cash receipts from sales for the months of April, May, and June are 63,000,51,600 and 34,400

    Explanation:

    As you can see we apply the percentages of collection of 60%, 30% and 5% to each month credit sales to get the total estimated cash collections.

    Casa Development, Inc.

    Budgeted Cash Schedule

    January February March April May June

    Revenues $55,000 75,000 90,000 80,000 60,000 35,000

    Credit Sales 80%

    Credit Sales 44000 60,000 72,000 64,000 48,000 28,000

    Collections 60% 30% 5%

    January

    44000 26,400 13,200 2,200

    Feb 60% 30% 5%

    60,000 36000 18000 3000

    Mar 60% 30% 5%

    72,000 43,200 21,600 3600

    Apr 60% 30% 5%

    64000 38400 19200 3,200

    May 60% 30%

    48,000 28,800 14,400

    June 60%

    28,000 16,800

    Total Cash Collections 63,000 51,600 34,400
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