Phillip Corporation Has the Following Sales Budget Credit Sales Are 80% of Total Sales

question 148

Essay

Phillip Corporation has the following sales budget:
$\begin{array}{ll}\text { Month }&\text { Budgeted Sales }\\\text { May } & \$ 84,000 \\\text { June } & 100,000 \\\text { July } & 92,000 \\\text { August } & 110,000 \\\text { September } & 90,000\end{array}$
Credit sales are 80% of total sales.Collections of credit sales are 80% in the month of sale,15% in the month after sale and 5% are never collected.
Required:
Prepare a schedule of cash collections for June,July and August.

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Definitions:

Coase Theorem

The proposition that even in the presence of externalities an economy can always reach an efficient solution as long as transaction costs are sufficiently low.

Transaction Costs

Expenses incurred when buying or selling goods and services, beyond the price of the goods themselves.

Sulfur Emissions

Gaseous emissions that include sulfur compounds, primarily sulfur dioxide, resulting from combustion processes and industrial activities.

Coase Theorem

A principle that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own, leading to an efficient outcome.