Augustine Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $ 904 comma 000 in October, $ 964 comma 000 in November, $ 1 comma 045 comma 000 in December, and $ 936 comma 000 in January. Augustine's sales are 20% cash and 80% credit. The company's collection history indicates that credit sales are collected as follows: 30% in the month of the sale 60% in the month after the sale 8% two months after the sale 2% are never collected Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instruction tab you will be marked wrong. Requirements 1 Prepare a sales budget for all four months, showing the breakdown between cash and credit sales. 2 Prepare a cash collections budget for December and January. a. Use cell references from the prior requirement, if applicable.
Answers
1. Sales Budget
October November December January
Total Sales $ 904,000 $ 964,000 $1,045,000 $ 936,000
Cash Sales - 20 $180,800 $192,800 $209,000 $187,200
Credit Sales - 80%$723,200 $771,200 $836,000 $748,800
2.Cash collections budget
December January
Cash Sales $209,000 $187,200
Credit Sales - 30% (0) $250,800 $224,640
Credit Sales - 60% (1) $462,720 $501,600
Credit Sales - 8% (2) $ 57,856 $ 61,696
Total $980,376 $975,136
Explanation:
1. Sales Budget
The Budget shows Both Cash and Credit Sales expected by the firm
2.Cash collections budget
Include Cash collections from both Cash and Credit Sales (as appropriate)
d. automatic stabilizers.
explanation:
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