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: Month Sales Purchases Cash Expenses Paid May $ 120,000 $ 90,000 $ 24,000 June 115,000 95,000 31,000 July 160,000 150,000 38,250 August 145,000 80,000 34,700 The majority of Martin’s sales (70 percent) are cash, but a few of the excursion companies purchase on credit. Of the credit sales, 40 percent are collected in the month of sale and 60 percent are collected in the following month. All of Martin’s purchases are on account with 55 percent paid in the month of purchase and 45 percent paid the following month. Required: 1. Determine budgeted cash collections for July and August. 2. Determine budgeted cash payments for July and August.

Explanation / Answer

A

B

Schedule of Expected Cash Collections Detail July August Beginning AR                      -                        -   Cash Sales-70%             112,000             101,500 160000*70%,145000*70% Credit Sales-40% of 30%=12%               19,200          17,400.00 160000*12%,145000*12% From last month Sales-60% of 30%=18%               20,700               28,800 115000*18%,,160000*18% Total Collections $    151,900.00 $    147,700.00

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.