Just need help answering c. & d. calculations I am using are not producing the c

Question

Just need help answering c. & d. calculations I am using are not producing the correct answers. Thanks!

Mast Corporation seeks your assistance in developing cash and other budget information for May, June, and July. At April 30, the company had cash of $12,000, accounts receivable of $872,000, inventories of $109,000, and accounts payable of $27,316. The budget is to be based on the following assumptions.

Purchase data are as follows.

Required:

a. Compute the budgeted purchases in dollars for May. 102,200 - correct  

b. Compute the budgeted purchases in dollars for June. 85,200 - correct

c. Compute the budgeted cash collections during May. (Do not round intermediate calculations.)
142,017.2 - incorrect

calculations - (may sales*%*(1-% discount made w/in 10 days)) + (may sales*% collection at end of month) + (april sales*% collection of following month)

d. Compute the budgeted cash disbursements during June. (Do not round intermediate calculations.)
91,320 - incorrect
calculations - (may purchase*%paid in following month) + (June purchase*%paid in current month)

e. Compute the budgeted number of units of inventory to be purchased during July. 11,250 - correct

  

Dollars Units March $ 153,400 11,800 April 196,300 15,100 May 141,700 10,900 June 161,200 12,400 July 143,000 11,000 August 13,600 11,200

Explanation / Answer

Answer

c.

Cash collection in May = (March Sales * 12%) + [(April Sales * 70%) – 2%] + (April Sales * 15%)

= (153,400 * 12%) + [(196,300*70%) – 2%] + (196,300 * 15%)

Cash collection in May = 182,514.8

12% of March Sale will receive in May

70% of April sales less 2% will be received in first 10 days of May

15% of April sales will be received in May

d.

We have to hold 125% of June month inventory in May month and the payment is done 64% in May month and 36% in June month.

And

We have to hold 125% of July month inventory in June month and the payment is done 64% in June month and 36% in July month.

And

Selling, general, and administrative expenses will be 15% of June month sales less Depreciation 4,000 and Payment is done 64% in June month and 36% in July Month.

Disbursements during June = {[(12,400 * 125%) * $8 per unit] * 36%} + {[(11,000 * 125%) * $8 per unit] * 64%} + {[($161,200 * 15%) – 4,000] * 64%}

= 44,640 + 70,400 + 12,915.2

Disbursements during June = $127,955.2

Note

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