CMA Study Group

Percentage sales collection

  • 1.  Percentage sales collection

    Posted 5 days ago
    I need help with this question .not sure how to calculate discounted period here .


    Projected Monthly Sales:
    Jan.    $300,000
    Feb.    $340,000
    Mar.    $370,000
    April.   $390000

    ▪︎the company bills each month's sales on the last day of month.
    ▪︎recievables are booked gross and credit terms of sales are  2/10,n/30.
    ▪︎50% of the the billings are collected within the discounted period
    ▪︎30% are collected by the end of the month
    ▪︎15% are collected by the end of the second month
    ▪︎5% become uncollectible. 
    Budgeted cash collections during April would be :
    a) $343,300
    b) $347,000
    c) $349,300
    d) $353,000


    Thankyou 

    Sent from my Verizon, Samsung Galaxy smartphone



  • 2.  RE: Percentage sales collection

    Posted 5 days ago
    Hi,

    As per my understanding, the discounted collection relevant for April cash flow is sales of March that are billed on the last day of March.

    Hence collection for April would not include anything relating to April sales as it would be billed on 30th April and not collectible in April.

    Collection for April - March sale*50%*98% +March sales*30%+ Feb sales*15% = $343300

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    Harjjeet Gahla (ACS LLB DBF ADM)
    FInancial Controller / Accountant
    Calgary Alberta
    Canada
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  • 3.  RE: Percentage sales collection

    Posted 5 days ago
    I am sorry as I forgot to deduct the 2% of the the 50% of March part

    ------------------------------
    Mohamed Aly
    Chief Financial Officer
    Jeddah
    Saudi Arabia
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  • 4.  RE: Percentage sales collection

    Posted 4 days ago
    AGREE

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    [Mohammed] [J Mari]
    [Senior Accountant]
    [Saudi fiance house]
    [Jeddah] [Makkah]
    [SAUDI ARABIA ]
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