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Kiel Center: Cash Collections Budget

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Kiel Center sells only on credit (no cash sales). Prior collection patterns show that 28% of a month's
sales are collected in the month of the sale, 51% are collected in the month after the sale, and 19%
are collected in the second month after the sale. For example, June sales would be collected over three month, June (28%), July (51%) and August (19%).. The rest would be considered "uncollectible" and not included in the cash collections budget.

Sales budget for June through September show:

June $227,000
July $286,000
August $305,000
September $375,000

What is the cash collection budget for August and September?

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Solution Summary

See Excel attached for schedules to guide you and instructional notes. Click in cells to see computations.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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