Cost Accounting Practice Problems

Diamond Service anticipates the following sales revenue over a five –month period:
November
December
January
February
March
Sales Revenue $ 16,000.00 $ 10,000.00 $ 15,000.00 $ 12,000.00 $ 14,000.00
Diamonds Service’s sales are 25% cash and 75% credit.
Diamond Service’s Collection history indicates that credit sales are collected as follows:
30% in the month of the sale
60% in the month after the sale
Percentages
25%
6% two months after the sale
30%
4% are never collected
6%
How much cash will be collected in January?, In February?, In March?
Calculated budgeted cash collections for January:
Cash collected from January cash sales:
Cash collected from January credit sales:
Cash collected from December credit sales:
Cash collected from November credit sales:
Total
Uncollected
Budgeted cash collections during January

$
$
$
$
$
$
$

3,750.00
3,375.00
4,500.00
720.00
12,345.00
493.80
11,851.20

75%
60%
4%

Calculated budgeted cash collections for February:
Cash collected from February cash sales:
Cash collected from February credit sales:
Cash collected from January credit sales:
Cash collected from December credit sales:
Total
Uncollected
Budgeted cash collections during February

$
$
$
$
$
$
$

3,000.00
2,700.00
6,750.00
450.00
12,900.00
516.00
12,384.00

Cash collected from March cash sales:
Cash collected from March credit sales:
Cash collected from February credit sales:
Cash collected from January credit sales:
Total
Uncollected
Budgeted cash collections during February

$
$
$
$
$
$
$

3,500.00
3,150.00
5,400.00
675.00
12,725.00
509.00
12,216.00