Problem:
Suppose a Gap store has the following data:
Accounts receivable, May 31: (.3 × May sales of $350,000) = $105,000
Monthly forecasted sales: June, $410,000; July, $440,000; August, $500,000; September, $530,000. Sales consist of 70% cash and 30% credit. All credit accounts are collected in the month following the sales. Uncollectible accounts are negligible and may be ignored.
Prepare a sales budget schedule and a cash collections budget schedule for June, July, and August.