PROBLEM 1

1 G Company is preparing its cash budget for the next year.

Budgeted sales for four months are as follows :
April 80,000
May 160,000
June 240,000
July 80,000
Fifty percent of the total sales is cash . The balance , or the
credit sales , is collected in the following manner :
70% in the month following the sale
20% in the second month following the sale
10% in the third month following the sale

How much is the budgeted cash receipts in July ? P 144,000.00

SOLUTION:
CASH RECEIPT
JULY
Cash Sales (JULY) 80,000 X 50% P 40,000.00
Collection on Credit Sales
JUNE 140,000 X 50% X 70% 84,000.00
MAY 160,000 X 50% X 20% 16,000.00
APRIL 80,000 X 50% X 10% 4,000.00
TOTAL CASH RECEIPT P 144,000.00