Schedule of Cash Collections on Accounts Receivable and Cash Budget Roybal Inc. sells all of its product on account. Roybal has the following accounts receivable payment experience: Percent paid in the month of sale 20 Percent paid in the month after the sale 55 Percent paid in the second month after the sale 23 To encourage payment in the month of sale, Roybal gives a 2% cash discount. Roybal's anticipated sales for the next few months are as follows: April $190,000 May 248,000 June 260,000 July 240,000 August 300,000 Required: Prepare a schedule of cash receipts for July.

Question

Business

Yuliana Gould

9 August, 21:04

Schedule of Cash Collections on Accounts Receivable and Cash Budget Roybal Inc. sells all of its product on account. Roybal has the following accounts receivable payment experience: Percent paid in the month of sale 20 Percent paid in the month after the sale 55 Percent paid in the second month after the sale 23 To encourage payment in the month of sale, Roybal gives a 2% cash discount. Roybal's anticipated sales for the next few months are as follows: April $190,000 May 248,000 June 260,000 July 240,000 August 300,000 Required: Prepare a schedule of cash receipts for July.

+3

Answers (1)

Know the Answer?

Luciano Salinas · Answer 1

Answer and Explanation:

The preparation of the schedule of cash receipts is shown below:

Schedule of cash receipts for July

For July Payments on account:

From May credit sales: ($248,000 * 23%) $57,040

From June credit sales: ($260,000 * 55%) $143,000

From July credit sales: ($240,000 * 20%) $48,000

Less: July cash discount ($48,000 * 2%) $ (960)

Cash receipts for July $247,080

Since the percentage of paid amount is given i. e For may it is 23%, for June it is 55% and for July it is 20% and the cash discount is 2%

So according to the percentage of the paid amount, the amounts are calculated i. e shown above