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    Cash budget

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    Practice Problem 29

    The forecasted sales pertain to Risco, Inc.:

    Month Sales
    January $400,000
    February 500,000
    March 300,000
    April 200,000

    Collection pattern:
    50 percent in month of sale
    50 percent in month following the sale

    Accounts Receivable (December 31) $70,000
    Finished Goods Inventory (December 31) 80,000

    The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20 percent of the next month's sales.

    How much cash does Risco expect to collect in February?

    © BrainMass Inc. brainmass.com June 3, 2020, 10:34 pm ad1c9bdddf
    https://brainmass.com/business/cash-budgeting/calculations-with-expected-cash-collection-238393

    Solution Summary

    The following solution shows calculations of expected cash collection during the month.

    $2.19

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