Martin Clothing Company is a retail company that sells hiking and other outdoor

Question

Martin Clothing Company is a retail company that sells hiking and other outdoor gear specially made for the desert heat. It sells to individuals as well as local companies that coordinate adventure getaways in the desert for tourists. The following information is available for several months of the current year:

The majority of Martin’s sales (70 percent) are cash, but a few of the excursion companies purchase on credit. Of the credit sales, 30 percent are collected in the month of sale and 70 percent are collected in the following month. All of Martin’s purchases are on account with 40 percent paid in the month of purchase and 60 percent paid the following month.

Required:
1. Determine budgeted cash collections for July and August. (Round your intermediate calculations and final answers to nearest whole dollar.)
July:

August:

2. Determine budgeted cash payments for July and August.
July/august

Month Sales Purchases Cash Expenses Paid May $ 99,000 $ 66,000 $ 19,000 June 117,000 93,000 28,000 July 130,000 115,000 33,750 August 125,000 79,000 29,400

Explanation / Answer

1 July August Cash sales 91000 87500 Credit sales: June sales 24570 July sales 11700 27300 August sales 11250 Budgeted cash collections 127270 126050 2 July August June purchases 55800 July purchases 46000 69000 August purchases 31600 Cash Expenses Paid 33750 29400 Budgeted cash payments 135550 130000

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