What are Shadee Corp.'s total cash receipts for August and September?
To calculate Shadee Corp.'s total cash receipts for August and September, we need to analyze the sales data provided. In August, Shadee expects to sell 480 sun visors, with 60% of the sales being cash sales and the remaining 40% being credit sales. The cash sales for August would be 60% of 480 units at $16 per unit. This means the cash sales for August would amount to $4,608.
For credit sales in August, 40% of the total sales would be on credit, which equals to 192 units. Of these credit sales, 52% is collected in the same month, while 37% is collected in the following month, and 11% is never collected. The cash collected for credit sales in August would be $1,003.04.
In September, the credit collections from the sales made in August would amount to $1,140.48, which is 37% of the credit sales from August. Additionally, the credit collections from sales that were never collected in August would be $353.28. Therefore, the total cash receipts for September would be $1,493.76.
Rounded to the nearest whole dollar, Shadee Corp.'s total cash receipts for August and September are $13,952 and $13,057, respectively.
Calculating Cash Receipts for August:
Cash Sales: 60% of 480 units at $16 = $4,608
Credit Collections (August Sales): $1,003.04
Total Cash Receipts for August: $4,608 + $1,003.04 = $5,611.04
Calculating Credit Collections for September:
Credit Collections (August Sales): 37% of 192 units at $16 = $1,140.48
Credit Collections (Never Collected): 11% of 192 units at $16 = $353.28
Total Cash Receipts for September: $1,140.48 + $353.28 = $1,493.76