Question

Day Company has the following sales budget: July August September $105,000 $211,000 $134,000 Credit sales represent 80 percent of budgeted sales. Of the credit sales, 20 percent is collected in the month of the sale, 60 percent in the month after the sale, and the remaining 15 percent is collected two months after the sale. Five percent of all sales are uncollectible and written-off. In September, total cash receipts from sales amount to

Answer 1

Answer:

Day Company

In September, total cash receipts from sales amount to:

= $162,080.

Explanation:

a) Data and Calculations:

sales budget:               Credit (80%)   Cash (20%)

July              $105,000      $84,000      $21,000

August         $211,000      $168,800     $42,200

September $134,000      $107,200      $26,800

                       July             August           September

Sales          $105,000      $211,000           $134,000

Credit sales   84,000       168,800              107,200

Cash sales     21,000        42,200             $26,800

20%                16,800        33,750                21,400

60% after sales                50,400               101,280

15% after 2 months                                      12,600

Total cash receipts from sales                $162,080