|
|
April |
May |
June |
|
Beg. Balance |
7,000 |
5,000 |
9,000 |
|
Cash sales |
10,000 |
10,000 |
10,000 |
|
Credit sales |
7,000 |
8,000 |
8,000 |
|
Cash expenses |
(20,000) |
(13,000) |
(13,000) |
|
Balance before borrowing |
4,000 |
10,000 |
14,000 |
|
Borrow / Repay |
1,000 |
-1,000 |
0 |
|
End. Balance |
5,000 |
9,000 |
14,000 |
Point to see -
Cash collection from credit sales (April) = Opening accounts
receivable + (Credit sales made in the month of April * 0.5)
                                                           Â
= $3,000 + ($8,000 * 0.5)
                                                           Â
= $7,000
Cash collection from credit sales (May) = (Credit sales made in
the month of April * 0.5) + (Credit sales made in the month of May
* 0.5)
                                                            Â
= ($8,000 * 0.5) + ($8,000 * 0.5)
                                                            Â
= $8,000
Similarly, cash collection from credit sales (in June) is equal
to $8,000.
