Question

Simpson Glove Company has made the following sales projections for the next six months. All sales are credit sales. March April May $41,000 June 50,000 July 32,000 August $47,000 58,000 62,000 Sales in January and February were $41,000 and $39,000, respectively. Experience has shown that of total sales receipts 10 percent are uncollectible, 40 percent are collected in the month of sale, 30 percent are collected in the following month, and 20 percent are collected two months after sale. Prepare a monthly cash receipts schedule for the firm for March through August. Simpson Glove Company Cash Receipts Schedule February March April January May June July August Credit sales In month of sale One month after sale Two months after sale Total cash receipts

Answer 1

Credit Sales Uncollectible In Month of Sale One month after sale Two Months after sale 10% 40% 30% 20% Jan 41,000 4,100 16,400 12,300 8,200 Feb 39,000 3,900 15,600 11,700 7,800 Mar 41,000 4,100 16,400 12,300 8,200 Apr 50,000 5,000 20,000 15,000 10,000 May 32,000 3,200 12,800 9,600 6,400 Jun 47,000 4,700 18,800 14,100 9,400 Jul 58,000 5,800 23,200 17,400 11,600 Aug 62,000 6,200 24,800 18,600 12,400 Jan 41000 Credit Sales In Month of Sale One month after sale Two Months after sale Total cash Receipts Mar Apr May 39000 41000 50000 32000 16,400 20,000 12,800 11,700 12,300 15,000 8,200 7,800 8,200 36,300 40,100 | 36,000 Jun Jul Aug 47000 58000 62000 18,800 23,200 24,800 9,600 14,100 17,400 10,000 6,400 9,400 38,400 | 43,700 51,600