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
The firm's expected cash receipts are :
June expected cash receipts $66,250
July expected cash receipts $82,500
August expected cash receipts $92,500
A cash receipts budget refers to a plan of expected cash to be received during a particular period. It is prepared so that the actual cash expected are known before hand.
A Firm Cash Receipts Budget
Particulars April ($) 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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