Answer:
a) Month Sales
April $300,000
May $320,000
June $370,000
Schedule of expected collections
For the month of June, 202x
Cash sales during June = $370,000 x 40% = $148,000
Collection from June's credit sales = $222,000 x 30% = $66,600
Collection from May's credit sales = $192,000 x 40% = $76,800
Collection from April's credit sales = $180,000 x 26% = $46,800
Total cash collections during June = $338,200
b) Month DM purchases
April $45,000
May $54,000
June $60,000
Schedule of expected cash payments for direct materials purchases
For the month of June, 202x
Cash purchases during June = $60,000 x 50% = $30,000
Cash payments for May's purchases = $27,000 x 40% = $10,800
Cash payments for April's purchases = $22,500 x 60% = $13,500
Total cash payments during June = $54,300
c) Month Sales
April $299,000
May $337,000
June $387,000
Schedule of expected collections
For the month of June, 202x
Cash sales during June = $370,000 x 40% = $148,000
Collection from June's credit sales = $222,000 x 30% = $66,600
Collection from May's credit sales = $192,000 x 50% = $96,000
Collection from April's credit sales = $180,000 x 18% = $32,400
Total cash collections during June = $343,000
It would be worth to pay the collector since the 2% reduction in uncollectible accounts is worth much more than the $1,000 that he/she earns.
d) Month DM purchases
April $45,000
May $54,000
June $60,000
Schedule of expected cash payments for direct materials purchases
For the month of June, 202x
Cash purchases during June = $60,000 x 40% = $24,000
Cash payments for May's purchases = $32,400 x 40% = $12,960
Cash payments for April's purchases = $27,000 x 60% = $16,200
Total cash payments during June = $53,160
