Business, 23.07.2019 04:20 ShlomoShekelstein

Memphis company anticipates total sales for april, may, and june of $800,000, $900,000, and $950,000 respectively. cash sales are normally 25% of total sales. of the credit sales, 30% are collected in the same month as the sale, 65% are collected during the first month after the sale, and the remaining 5% are not collected. compute the amount of cash received from credit sales during the month of may.

Answers: 1

Show answers

Answers

$\text{Cash received=\text{Credit sales of May}\times\text{Receivable in currect month}}\\= \$675,000\times 30\%\\=\$202,500$ The total cash received from the credit sales during the month of May is $592,500.

Further Explanation:

Sales budget:

Sales budget is the estimated sales for the budgeted period. It is prepared by studying the prior year’s sales and then adds the estimated addition based on the business conditions. Sales budget is prepared to plan the revenue measures. It includes the number of unit that would be sold in the budgeted period.

Calculate the cash received from credit sales during the month of May:

The cash received from credit sales will include the cash received from the credit sales of current month and cash received from the credit sales of prior month. Only 30% of May’s credit sales will be considered and the 65% of April’s credit sales will be considered for the calculation of the cash received from credit sales during the month of May. Cash sales are 25% of total sales and the remaining are credit sales. So credit sales will be 75% of the total sales.

Cash received from the credit sales during the month of May:

$\text{Cash received} = \text{Cash received from May sales}+\text{Cash received from April sales}\\=\$ 202,500+\$ 390,000\\=\$ 592,500$

Thus, the total cash received from the credit sales during the month of May is $592,500.

Working note 1:

Total credit sales for the month of May:

$\text{Credit sales of May}=\text{Total Sales}\times\text{Credit sales\%}\\=\$ 900,000\times75\% \\=\$675,000$

The total credit sales for the month of May are $675,000.

Working note 2:

Cash received from the credit sales of May:

$\text{Cash received}=\text{Credit sales of May}\times\text{Receivable in currect month}\\= \$ 675,000}\times 30\%\\ =$202,500$

The total cash received from the credit sales of May is $202,500.

Working note 3:

Total credit sales for the month of April:

$\text{Credit sales of April}=\text{Total Sales}\times\text{Credit sales\% }\\=\$ 800,000}}\times 75\%\\=\$600,000$

The total credit sales for the month of May are $600,000.

Working note 4:

Cash received from the credit sales of April:

$\text{Cash received}=\text{Credit sales of April}\times\text{Receivable in current month}\\=\$ 600,000}}\times 65\%\\=\$ 390,000$

Learn more:

1. Learn more about the percentage of sales method

2. Learn more about the allocation cost

3. Learn more about the average cost per unit

Answer details:

Grade: Senior School

Subject: Cost accounting

Chapter: Budgeting

Keywords: Budgeting, Cost accounting, Accounting, Cash sales, Credit sales, Cost allocation, Cash received from sales, Cash received from credit sales, Sales budget, Sales forecast, Revenue forecast, Revenue budget, Memphis Company, Total sales, April, May, and June.

Answer from: Quest

an important city to the south and the region's capital is c. kiev

Answer from: Quest

disadvantages of leasing a vehicle: no vehicle equity and mileage limitations

disadvantages of purchasing a vehicle: large down payment and vehicle depreciation

#plato4lyfe

Another question on Business

Business, 22.06.2019 13:40

Computing equivalent units is especially important for: (a) goods that take a relatively short time to produce, such as plastic bottles. (b) goods with sustainability implications in their production processes. (c) goods that are started and completed during the same period. (d) goods that take a long time to produce, such as airplanes.

Answers: 2

Answer

Business, 23.06.2019 00:00

3. which of the following occupations relate to a skill category of mathematics and data? select all that apply. (2 correct answers) engineer financial analyst mechanic sales person 4. which of the following occupations relate to a skill category of words and literacy? select all that apply. (2 correct answers) educator lawyer marketing manager psychologist architect

Answers: 1

Answer

Business, 23.06.2019 02:30

The wall street journal reported that over a recent five-month period, a downturn in the economy has caused endowments to decline 23%. what is the estimate of the dollar amount of the decline in the total endowments held by these 10 universities (to the nearest billion)?

Answers: 3

Answer

Business, 23.06.2019 07:50

Acountry has reached a level of economic development where the manufacturing of both semidurable and nondurable consumer goods has just begun. also, the goods demanded relate to equipment and supplies to support manufacturing. in which stage of rostow’s five-stage model of economic growth does the country fit?

Answers: 1

Answer

You know the right answer?

Memphis company anticipates total sales for april, may, and june of $800,000, $900,000, and $950,000...

Questions

Business, 18.08.2019 02:10

Real and nominal variables are highly intertwined, and changes in the money supply change real gdp. most economists would agree that this statement ac...

Business, 18.08.2019 02:10

Smith co., maker of high-quality eyewear, incurs fixed costs of $21 and variable costs of $42 in making one unit of its matrix line of sunglasses, bas...

Business, 18.08.2019 02:10

Simplex games, a not-for-profit entity organized to provide athletic competition opportunities for high school students, utilizes a number of voluntee...

Business, 18.08.2019 02:10