The management of Vuti has supplied the following sales amounts for the next five months: January February March April May R60 000 R75 000 R55 000 R65 000 R50 000 Additional information: • Off all sales 35% are cash sales based in value. • Of credit sales 50% is collected within the month of sales. Two-thirds of the credit sales collected within the month of sales receives 2% discount. A further 30% of credit sales is collected in the following month; and the remaining credit sales is collected in the month thereafter. Bad debts amounts to 3% of the credit sales. Required: Prepare a debtor's collection schedule that clearly shows how credit sales for the five months will be collected. NB: Round off calculations to two decimal places and the final amount to the nearest value.

The management of Vuti has supplied the following sales amounts for the next five months: January February March April May R60 000 R75 000 R55 000 R65 000 R50 000 Additional information: • Off all sales 35% are cash sales based in value. • Of credit sales 50% is collected within the month of sales. Two-thirds of the credit sales collected within the month of sales receives 2% discount. A further 30% of credit sales is collected in the following month; and the remaining credit sales is collected in the month thereafter. Bad debts amounts to 3% of the credit sales. Required: Prepare a debtor's collection schedule that clearly shows how credit sales for the five months will be collected. NB: Round off calculations to two decimal places and the final amount to the nearest value.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...

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A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and the remainder are credit sales. The company finds that typically 10 percent of a months credit sales are paid in the month of sale, 70 percent are paid the next month, and 15 percent are paid in the second month after sale. Expected cash receipts in July are budgeted at what amount? a. 114,520 b. 143,150 c. 145,720 d. 156,000
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