E8-11 (Algo) Calculating Cash Receipts [LO 8-4]Shadee Corporation expects to sell 640 sun shades in May and 360 in June. Each shades sells for $11. Shadee's beginningand ending finished goods inventories for May are 85 and 55 shades, respectively. Ending finished goods inventory forJune will be 55 shades.It expects the following unit sales for the third quarter:JulyAugustSeptember545480440Sixty percent of Shadee's sales are cash. Of the credit sales, 52 percent is collected in the month of the sale, 39 percent iscollected during the following month, and 9 percent is never collected.Required:Calculate Shadee's total cash receipts for August and September.Note: Do not round your intermediate calculations. Round your answers to the nearest whole dollar.AugustSeptemberTotal Cash Receipts

Step 1:Computation of the total cash and credit sales: JulyAugustSeptember Unit sales545480440…

Answered: E8-11 (Algo) Calculating Cash Receipts…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Al Bahr Corporation, a wholesaler, provided the following informationMonthSalesJanuary64000February59000March42000April48000Customers pay 60% of their balances in the month of sale, 30% in the month following sale, and 10% in the second month following sale.Required: Determine the expected cash collection during March.
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The Palos Company expects sales for June, July, and August of $48,000, $54,000, and $44,000, respectively. Experience suggests that 40% of sales are for cash and 60% are on credit. The company collects 50% of its credit sales in the month following sale, 45% in the second month following sale, and 5% are not collected. What are the company's expected cash receipts for August from its current and past sales?

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