Answer:
Martin Clothing company
July August
1. Budgeted cash collections $130,480 $128,260
2. Budgeted cash payments $137,000 $125,850
Explanation:
a) Data and Calculations:
Month Sales Purchases Cash Expenses Paid
May $96,000 $70,000 $19,000
June 121,000 87,000 24,000
July 133,000 117,000 33,500
August 127,000 72,000 33,600
May June July August
Sales $96,000 $121,000 $133,000 $127,000
Purchases 70,000 87,000 117,000 72,000
Expense 19,000 24,000 33,500 33,600
Cash Collections:
May June July August
Sales $96,000 $121,000 $133,000 $127,000
Collections:
65% cash $62,400 $78,650 $86,450 $82,550
14% month 13,440 16,940 18,620 17,780
21% following 20,160 25,410 27,930
Total collections for July and August $130,480 $128,260
Cash payments:
May June July August
Purchases 70,000 87,000 117,000 72,000
55% $38,500 $47,850 $64,350 $39,600
45% 31,500 39,150 52,650
Expense 19,000 24,000 33,500 33,600
Payments for July and August $137,000 $125,850
