Question

Cash receipts A firm has actual sales of $61,000 in April and $62,000 in May. It expects sales of $73,000 in June and $100,000 in July and in August. Assuming that sales are the only source of cash inflows and that half of them are for cash and the remainder are collected evenly over the following 2 months, what are the firm's expected cash receipts for June, July, and August? Complete the cash receipts table below: (Round to the nearest dollar.) April July Мay June August $ 61,000 $ 62,000 $ 73,000 $ 100,000 $ Sales 100,000 $ Cash sales Collections: $ Lag 1 month Lag 2 months $ Total cash receipts A EA EA EA

Answer 1

	April	May	June	July	August
Sales	61000	62000	73000	100000	100000
Cash sales	30500 [ 61000*50% ]	31000 [ 62000*50% ]	36500 [ 73000*50% ]	50000 [ 100000*50% ]	50000 [ 100000*50% ]
Collections :
Lag 1 month		15250 [ 61000*50%*1/2 ]	15500 [ 62000*50%*1/2 ]	18250 [ 73000*50%*1/2 ]	25000 [ 100000*50%*1/2 ]
Lag 2 month			15250 [ 61000*50%*1/2 ]	15500 [ 62000*50%*1/2 ]	18250 [ 73000*50%*1/2 ]
Total cash receipts			67250	83750	93250