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Cash Receipts Budget and Accounts Receivable Aging Schedule

Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales:

Quarter 1	$4,650,000
Quarter 2	5,730,000
Quarter 3	4,150,000
Quarter 4	8,140,000

In Shalimar's experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,430,000 and for the fourth quarter of the current year are $7,780,000.

Required:

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1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year.

Quarter	Cash Sales	Credit Sales
3, current year	$fill in the blank 05dd1dfc0034008_1	$fill in the blank 05dd1dfc0034008_2
4, current year	fill in the blank 05dd1dfc0034008_3	fill in the blank 05dd1dfc0034008_4
1, next year	fill in the blank 05dd1dfc0034008_5	fill in the blank 05dd1dfc0034008_6
2, next year	fill in the blank 05dd1dfc0034008_7	fill in the blank 05dd1dfc0034008_8
3, next year	fill in the blank 05dd1dfc0034008_9	fill in the blank 05dd1dfc0034008_10
4, next year	fill in the blank 05dd1dfc0034008_11	fill in the blank 05dd1dfc0034008_12

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2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. If an amount is zero, enter "0".

	Quarter 1	Quarter 2	Quarter 3	Quarter 4
Cash sales	$fill in the blank f0a817076f8c068_1	$fill in the blank f0a817076f8c068_2	$fill in the blank f0a817076f8c068_3	$fill in the blank f0a817076f8c068_4
Received on account from:
Quarter 3, current year	fill in the blank f0a817076f8c068_5
Quarter 4, current year	fill in the blank f0a817076f8c068_6	fill in the blank f0a817076f8c068_7
Quarter 1, next year	fill in the blank f0a817076f8c068_8	fill in the blank f0a817076f8c068_9	fill in the blank f0a817076f8c068_10
Quarter 2, next year		fill in the blank f0a817076f8c068_11	fill in the blank f0a817076f8c068_12	fill in the blank f0a817076f8c068_13
Quarter 3, next year			fill in the blank f0a817076f8c068_14	fill in the blank f0a817076f8c068_15
Quarter 4, next year	fill in the blank f0a817076f8c068_16	fill in the blank f0a817076f8c068_17	fill in the blank f0a817076f8c068_18	fill in the blank f0a817076f8c068_19
Total cash receipts	$fill in the blank f0a817076f8c068_20	$fill in the blank f0a817076f8c068_21	$fill in the blank f0a817076f8c068_22	$fill in the blank f0a817076f8c068_23

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3. What if the recession led Shalimar's top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.

	Quarter 1	Quarter 2	Quarter 3	Quarter 4
Cash sales	$fill in the blank c120ad015fcfff8_1	$fill in the blank c120ad015fcfff8_2	$fill in the blank c120ad015fcfff8_3	$fill in the blank c120ad015fcfff8_4
Received on account from:
Quarter 4, current year	fill in the blank c120ad015fcfff8_5
Quarter 1, next year	fill in the blank c120ad015fcfff8_6	fill in the blank c120ad015fcfff8_7
Quarter 2, next year		fill in the blank c120ad015fcfff8_8	fill in the blank c120ad015fcfff8_9
Quarter 3, next year			fill in the blank c120ad015fcfff8_10	fill in the blank c120ad015fcfff8_11
Quarter 4, next year				fill in the blank c120ad015fcfff8_12
Total cash receipts	$fill in the blank c120ad015fcfff8_13	$fill in the blank c120ad015fcfff8_14	$fill in the blank c120ad015fcfff8_15	$fill in the blank c120ad015fcfff8_16