1.Big City Manufacturing (BCM) is preparing its cash budget and expects to have sales of $450,000...

50.1K

Verified Solution

Question

Finance

1.Big City Manufacturing (BCM) is preparing its cashbudget and expects to have sales of $450,000 in January, $375,000in February, and $555,000 in March. If 20% of the sales arefor cash, 45% are credit sales paid in the month after the sale,and another 35% are credit sales paid 2 months after the sale, whatare the expected cash receipts for March?
2.In problem 1, Big City Manufacturing (BCM) assumedthat all credit sales were paid in full, which is notrealistic. BCM studied its past credit sales and determinedthat 3.25% of its credit sales resulted in Bad Debts that werenever collected. Using the data from the previous problemwith the new assumption that 3.25% of credit sales were nevercollected, what is your revised estimate for the expected cashreceipts for March?

Answer & Explanation Solved by verified expert

4.3 Ratings (912 Votes)

See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

1.Big City Manufacturing (BCM) is preparing its cashbudget and expects to have sales of $450,000 in January, $375,000in February, and $555,000 in March. If 20% of the sales arefor cash, 45% are credit sales paid in the month after the sale,and another 35% are credit sales paid 2 months after the sale, whatare the expected cash receipts for March? 2.In problem 1, Big City Manufacturing (BCM) assumedthat all credit sales were paid in full, which is notrealistic. BCM studied its past credit sales and determinedthat 3.25% of its credit sales resulted in Bad Debts that werenever collected. Using the data from the previous problemwith the new assumption that 3.25% of credit sales were nevercollected, what is your revised estimate for the expected cashreceipts for March?