Answer:
1) 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 = $387,000 x 40% = $154,800
Collection from June's credit sales = $232,200 x 20% = $46,440
Collection from May's credit sales = $202,200 x 50% = $101,100
Collection from April's credit sales = $179,400 x 26% = $46,644
Total cash collections during June = $348,984
Month DM purchases
April $44,000
May $55,000
June $55,000
Schedule of expected cash payments for direct materials purchases
For the month of June, 202x
Cash purchases during June = $55,000 x 50% = $27,500
Cash payments for May's purchases = $27,500 x 40% = $11,000
Cash payments for April's purchases = $22,000 x 60% = $13,200
Total cash payments during June = $51,700
2) 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 = $387,000 x 40% = $154,800
Collection from June's credit sales = $232,200 x 30% = $69,660
Collection from May's credit sales = $202,200 x 50% = $101,100
Collection from April's credit sales = $179,400 x 18% = $32,292
Total cash collections during June = $357,852
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.
3) Month DM purchases
April $44,000
May $55,000
June $55,000
Schedule of expected cash payments for direct materials purchases
For the month of June, 202x
Cash purchases during June = $55,000 x 40% = $22,000
Cash payments for May's purchases = $33,000 x 40% = $13,200
Cash payments for April's purchases = $26,400 x 60% = $15,840
Total cash payments during June = $51,040
Cash payments will decrease a little in June.
