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    Cash receipt schedule Profit Planning

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    9-32
    Splendid Stereo, Inc. is a large retailer of stereo equipment. The controller is about to prepare the budget for the first quarter of 20x5. Past experience has indicated that 75 percent of the store's sales are cash sales. The collection experience for the sales on account is as follows:

    80% during month of sale
    15% during month following sale
    5% uncollectible

    The total sales for December 20x4 are expected to be $380,000. The controller feels that sales in January 20x5 could range from $200,000 to $320,000.

    1. Demonstrate how financial planning can be used to project cash receipts in January of 20x5 for three different levels of January sales. Use the following columnar format.

    Total Sales in January, 20x5
    $200,000 $260,000 $320,000
    Cash receipts in January 20x5:
    From December sales on account
    $______ $______ $______
    From January cash sales
    $______ $______ $______
    From January sales on account
    $______ $______ $______

    Total cash receipts
    $______ $______ $______

    2. How could the controller of Splendid Stereo, Inc. use this financial planning approach to help in planning operations for January?

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    https://brainmass.com/business/business-management/cash-receipt-schedule-profit-planning-90667

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    9-32
    Splendid Stereo, Inc. is a large retailer of stereo equipment. The controller is about to prepare the budget for the first quarter of 20x5. Past experience has indicated that 75 percent of the store's sales are cash sales. The collection experience for the sales on account is as follows:

    80% during month of sale
    15% during month following sale
    5% uncollectible

    The total sales for December 20x4 are expected to be $380,000. The ...

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    This solution is comprised of a detailed explanation to answer the request of the assignment in text file.

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