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Accounting

icky Tacky Co. is formulating its plans for the year 2007, including the preparation of its cash budget. Historically, 25% of the company's sales are cash sales. Except for its 5% bad debt, the remaining credit sales are collected as follows:

Collections from Receivables Total Sales $
January 2,500,000
In 1st month 20% February 3,000,000
In 2nd month 30% March 3,500,000
In 3rd month 15% April 4,000,000
In 4th month 5% May 4,500,000

NOTE: Each month there is a 10% sales return on credit sales. The credit sales return does not affect the 25% collected. Prepare a schedule to show the cash receipts from sales and collections for the month of 2007.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M939817

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