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Question 2. (cash receipts from sales) Budgeted sales revenue for the coming five months is as follows: Month Sales revenue August $195,000 September $165,000 October $135,000 November $100,000 December $120,000 You estimate that you will collect 45% of sales revenue in the month of sale, 40% in the following month, 5% two months after the sale, and the remaining 10% three months after the sale.

Compute budgeted cash inflows for November and December.

Answer :

facundobuzzetti

Answer:

November= $126,750

December= $117,250

Explanation:

Giving the following information:

Month Sales revenue:

August $195,000

September $165,000

October $135,000

November $100,000

December $120,000

You estimate that you will collect 45% of sales revenue in the month of sale, 40% in the following month, 5% two months after the sale, and the remaining 10% three months after the sale.

Cash collection November:

From August= 0.10*195,000= 19,500

From September= 165,00*0.05= 8,250

From October= 135,00*0.4= 54,000

From November= 100,000*0.45= 45,000

Total= 126,750

Cash collection December:

From September= 165,00*0.10= 16,500

From October= 135,00*0.05= 6,750

From November= 100,000*0.40= 40,000

From December= 120,000*0.45= 54,000

Total= $117,250

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