7-30

7-30

Suppose a lumber yard has the following data:

·         Accounts receivable, May 31: (.3 X May sales of $350,000)=$105,000

·         Monthly forecasted sales: June, $430,000; July, $440,000; August, $500,000; September, $530,000

Sales consist of 70% cash and 30% credit. All credit accounts are collected in the month following the sales. Uncollectible accounts are negligible and may be ignored.

Prepare a sales budget schedule and a cash collections budget schedule for June, July and August.