nike D ezt tion.com/hm.tpx E8-18 Preparing Cash Receipts and Cash Payments Budge

Question

nike D ezt tion.com/hm.tpx E8-18 Preparing Cash Receipts and Cash Payments Budgets LO 8-4) Martin Clothing Company is a retal company that sells hiking and other outdoor gear specaly made for the getaways in the desert for tourists. The following information is available for several months of the current year June July August S 98.000 $ 67,000 $ 24.000 28.000 36.250 75,000 28,700 116.000 132.000 132,000 91,000 111,000 credit. Of the credit sales, 40 percent are colected i n the monm of sale and 60 percent are The malorthy of kiartin's sales (63 percentae cash but a few ot the eucusinmne account with 40 percent paid in the month of purchase and 60 percent paid the tollowing month collected in the following month. All of Martin's purchases are on Required 1. Determine budgeted cash collections for July and August (Round your intermediate and final answers to nearest whole dollar.) Cash O Type here to search

Explanation / Answer

Ans.1 July August Budgeted cash collections 128640 132000 *Calculation: budgeted cash collections = Cash sales + Credit sales July 85800 + 42840 128640 August 85800 + 46200 132000 *Calculation of cash sales: July 132000 * 65% 85800 August 132000 * 65% 85800 *Credit sales = Total sales - Cash sales 100% - 65% 35.00% *Calculation of credit sales of all months: 35% of may 98000*35% 34300 35% of june 116000*35% 40600 35% of july 132000*35% 46200 35% of august 132000*35% 46200 *Calculation of budgeted credit sales collections: July August June (40600 * 60%) 24360 July (46200 * 40%) 18480 July (46200 * 60%) 27720 August (46200 * 40%) 18480 Total 42840 46200 Ans.2 July August Budgeted cash payment 135250 125300 *Budgeted cash payment = Credit purchase + cash expenses July 99000 + 36250 135250 August 96600 + 28700 125300 *Calculation of credit purchase (all purchase is credit purchase): July August June (91000 * 60%) 54600 July (111000 * 40%) 44400 July (111000 * 60%) 66600 August (75000 * 40%) 30000 Total 99000 96600 *we assumed that all expenses are incurred in the same month.

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