Question 5 – This question has 1 part (8 marks)   8 marks   The


Question 5 – This question has 1 part (8 marks)

8 marks

The owner of Tiger Trading Ltd. has approached you to help her to predict cash collections from customers in the month of June 2022. To assist your task, she has provided you with the following information:

Tiger Trading is a shirt wholesaler based in Lalor, VIC. Selling price per shirt is $10 (Ignore GST)

Monthly Budgeted Income Statement

 30 April 2022
in $
31 May 2022
in $
30 June 2022
in $
30 July 2022
in $
LESS: Cost of Sales(32,000)(40,000)(44,000)(36,000)
GROSS PROFIT48,00060,00066,00054,000
General Expenses(15,000)(17,500)(20,000)(18,000)
TOTAL EXPENSES(28,000)(30,500)(33,000)(31,000)
NET PROFIT20,00029,50033,00023,000


Past history shows that 30% of sales are cash sales and 70% of sales are made on credit.

The basis for cash collections from credit customers are:

·         60% in the month of sale.

·         30% in the month following the sale.

·         10% in the second month following the sale.


Prepare a schedule of cash collections for the month of June 2022. (8 Marks)

It’s that simple.Pay only when you are satisfied.

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