Cash receipts A firm has actual sales of $65,000 in April and $60,000 in May. It expects sales of $70,000 in June and $100,000 in July and in August. Assuming that sales are the only source of cash inflows and that half of them are for cash and the remainder are collected evenly over the following 2 months, what are the firm's expected cash receipts for June, July, and August?

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johndacres7440 johndacres7440

22-09-2020
Business

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Cash receipts A firm has actual sales of $65,000 in April and $60,000 in May. It expects sales of $70,000 in June and $100,000 in July and in August. Assuming that sales are the only source of cash inflows and that half of them are for cash and the remainder are collected evenly over the following 2 months, what are the firm's expected cash receipts for June, July, and August?

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amcool amcool · Answer 1 · 2020-09-24T02:37:05+02:00

Answer:

June expected cash receipts = $66,250

July expected cash receipts = $82,500

August expected cash receipts = $92,500

Explanation:

Note: See the attached excel file for the cash budget and the calculation.

The firm's expected cash receipts for June, July, and August can be determined by preparing a cash receipts budget.

A cash receipts budget refers to a plan of expected cash to be received during a particular period.

From the attached excel file, the firm's expected cash receipts for June, July, and August are as follows:

June expected cash receipts = $66,250

July expected cash receipts = $82,500

August expected cash receipts = $92,500

ayokenny2001 ayokenny2001 · Answer 2 · 2022-03-22T13:08:14+01:00

The firm's expected cash receipts are :

June expected cash receipts $66,250

July expected cash receipts $82,500

August expected cash receipts $92,500

What is cash receipts budget?

A cash receipts budget refers to a plan of expected cash to be received during a particular period. It is prepared so that the actual cash expected are known before hand.

A Firm Cash Receipts Budget

Particulars April ($) May ($) June ($) July ($) August ($)

Sales 65,000 60,000 70,000 100,000 100,000

Cash sales (Sales * 50%) 32,500 30,000 35,000 50,000 50,000

Cash Collections:

Lag 1 month (Last month sales * 50% * 0.5) - 16,250 15,000 17,500 25,000

Lag 2 months (Last 2 months sales * 50% * 0.5) - - 16,250 15,000 17,500

Total cash receipt 32,500 46,250 66,250 82,500 92,500

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