please write answer where it suppose to be . thanks Aztec Company sells Its prod

Question

please write answer where it suppose to be . thanks

Aztec Company sells Its product for $150 per unlt. Its actual and budgeted sales follow. Units Dollars April (actual) May (actual) June (budgeted) July (budgeted) August (budgeted) 6,588 975,8ee 2,288 6,588 5,588 3,788 338,888 975,888 325,80e 555,888 All sales are on credit. Recent experience shows that 26% of credit saleG Is collected in the month of the sale, 44% in the month after the sale, 28% in the second month after the sale, and 2% proves to be uncollectible. The product's purchase price is $110 per unit, 60% of purchases made in a month is pald in that month and the other 40% is paid in the next month. The company has a policy to maintain an ending monthly inventory of 21% of the next month's unit sales plus a safety stock of 140 units. The April 30 and May 31 actual Inventory levels are consistent with this policy. Selling and administrative expenses for the year are $1,548,000 and are pald evenly throughout the year In cash. The company's minlmum cash balance at month-end is $140,000. This minlmum is malntalned, If necessary, by borrowing cash from the bank. If the balance exceeds $140,000, the company repays as much of the loan as it can without going below the minimum. This type of loan carries an annual 12% Interest rate. On May 31, the loan balance Is $31.500, and the company's cash balance Is $140,000. Required: 1. Prepare a schedule that shows the computation of cash collections of Its credit sales (accounts recelvable) In each of the months of June and July 2 Prepare a schedule that shows the computation of budgeted ending Inventorles (In unlts) for April, May, June, and July. 3. Prepare the merchandise purchases budget for May, June, and July. Report calculations In units and then show the dollar amount of purchases for each month. 4. Prepare a schedule showing the computation of cash payments for product purchases for June and July 5. Prepare a cash budget for June and July, Including any loan activity and Interest expense. Compute the loan balance at the end of each month.

Explanation / Answer

Solution:-

(1)

(2)

(3)

June July Sale of month April 273000 - Sale of month May 145200 92400 Sale of month June 253500 429000 Sale of month July - 214500 Total 671700 735900

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

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