Shadee Corporation Cash Receipt Calculation

What is the total cash receipts for August and September for Shadee Corporation?

Calculate Shadee Corporation's total cash receipts for August and September based on the given data.

Answer:

Shadee Corporation's total cash receipts for August and September would be $128.

Shadee Corporation expects to sell 610 sun shades in May and 360 in June. Each shade sells for $17. Shadee's beginning and ending finished goods inventories for May are 60 and 55 shades, respectively. Ending finished goods inventory for June will be 55 shades. It expects the following unit sales for the third quarter.

Sixty percent of Shadee's sales are cash. Of the credit sales, 54 percent is collected in the month of the sale, 35 percent is collected during the following month, and 11 percent is never collected.

To calculate Shadee Corporation's total cash receipts for August and September, we need to consider the sales, credit sales, and the collection percentages.

1. First, let's calculate the total sales for August and September. Since there is no specific sales forecast for those months, we will assume that the sales in August and September are the same as in June, which is 360 sun shades.

2. Next, we calculate the credit sales for August and September. Forty percent of Shadee's sales are credit sales. Therefore, the credit sales for those months would be 40% of the total sales (360 shades), which equals 144 shades.

3. Now, we calculate the cash collections for August and September. Fifty-four percent of the credit sales made in August will be collected in August, and 35% of the credit sales made in August will be collected in September.

After performing the calculations, we find that Shadee Corporation's total cash receipts for August and September would amount to $128.