Crowley Company projects the following sales: EE(Click on the icon to view the projected sales). Crowley collects sales on account in the month after the sale. The Accounts Receivable balance on 1 is, which represents 's sales on account. Crowley projects the following cash receipts from customers:
Re-calculate cash receipts from customers if total sales remain the same but cash sales are only 20% of the total.
January February March
Cash sales (20 %)
Sales on account (80%)
Total sales $20,000 $22.000 $24,00
January February March
Cash sales (25%) 5,000 5,000 $6,000
Sales on account (75%) $15,500 16,000 18,000
Total sales 20,000 $ 22,000 $ 24,000
Now, recalculate cash receipts from customers for each month if cash sales are only 20 % of the total.
January February March
Cash receipts from cash sales 5,500 5,000 $6,000
Cash receipts from sales on account 13,500 15,000 16.500
Total cash receipts from customers 18,500 $20,500 $22,500

Complete Question:

Crowley Company projects the following sales:

                                            Jan           Feb          March

Cash Sales (25%)             $5,000     $5,500     $6,000

Sales on account (75%)    15,000      15,500      18,000

Total Sales                     $20,000   $22,000   $24,000

Crowley collects sales on account in the month after the sale.  The Accounts Receivable balance on January 1 is $13,500, which represents December's sales on account.  Crowley projects the following cash receipts from customers:

                                            Jan           Feb          March

Cash Sales (20%)             $5,000     $5,500      $6,000

Sales on account (75%)    13,500      16,000       16,500

Total Sales                      $18,500   $20,500   $22,500

1. Recalculate cash receipts from customers if total sales remain the same but cash sales are only 20% of the total.

Crowley Company

1. Recalculation of cash receipts from customers if total sales remain the same but cash sales are only 20% of the total:

                                                                         Jan           Feb          March

Cash receipts from cash sales (20%)           $4,000     $4,400      $4,800

Cash receipts from sales on account (80%) 14,400      16,000       17,600

Total receipts from sales                             $18,400   $20,400   $22,400

Explanation:

a) Calculations of Sales:

December sales = $13,500/0.75 = $18,000

Sales based on 20% cash and 80% on account:

                                              Dec.          Jan.          Feb.         March

Cash Sales (20%)               $3,600     $4,000     $4,400      $4,800

Sales on account (80%)      14,400      16,000      17,600      19,200

Total Sales                        $18,000   $20,000  $22,000   $24,000

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