Fredder Company usually sells about 20% of its merchandise during a month for cash with the remaining sales on account. The company's accounts receivable payment history is as follows: 30% in the month of sale, 50% in the month following, and 15% in the second month following sale. Total budgeted sales for the second quarter are as follows:
April $100,000
May 120,000
June 80,000
Assume all questions relate to the month of June.
Required:
A. Calculate the expected cash sales.
B. Calculate the expected receipts from accounts receivable for sales made in April.
C. Calculate the expected receipts from accounts receivable for sales made in May.
D. Calculate the total expected cash receipts.
E. From the above accounts receivable history information, receipts from accounts receivable do not equal 100%. Why not? Does this amount appear on the cash budget?

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The Answer of Fredder Company usually sells about 20% of its merchandise during a month for cash with the remaining sales on account. The company's accounts receivable payment history is as follows: 30% in the month of sale, 50% in the month following, and 15% in the second month following sale. Total budgeted sales for the second quarter are as follows:
April $100,000
May 120,000
June 80,000
Assume all questions relate to the month of June.
Required:
A. Calculate the expected cash sales.
B. Calculate the expected receipts from accounts receivable for sales made in April.
C. Calculate the expected receipts from accounts receivable for sales made in May.
D. Calculate the total expected cash receipts.
E. From the above accounts receivable history information, receipts from accounts receivable do not equal 100%. Why not? Does this amount appear on the cash budget?

Fredder Company Usually Sells About 20% of Its Merchandise During