Tilson Corporation has projected sales and production in units for the second qu

Question

Tilson Corporation has projected sales and production in units for the second quarter of the coming year as follows: April 65,00055,000 75,000 65,000 May Sales Production June 75,000 65,000 Cash-related production costs are budgeted at $7 per unit produced. Of these production costs, 35% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $70,000 per month. The accounts payable balance on March 31 totals $186,000, which will be paid in April. All units are sold on account for $19 each. Cash collections from sales are budgeted at 50% in the month of sale, 40%-n the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totaled $630,000 ($110,000 from February's sales and $520,000 from March's sales). Required: a. Prepare a schedule for each month showing budgeted cash disbursements for Tilson Corporation. b. Prepare a schedule for each month showing budgeted cash receipts for Tilson Corporation Complete this question by entering your answers in the tabs below. Required A Required B

Explanation / Answer

a. Schedule of cash disbursement: April May June Production cost 525000 455000 455000 (75000*7) (65000*7) (65000*7) Cash disbursement: Production costs this month (35%) 183750 159250 159250 Production costs prior month (65%) 341250 295750 (525000*65%) (455000*65%) Selling and administrative expenses 70000 70000 70000 Accounts payable balance on Mar 31 186000 Total disbursements 439750 570500 525000 b. Schedule of cash receipts: April May June Total sales 1235000 1045000 1425000 (65000*19) (55000*19) (75000*19) Cash receipts: February sales 110000 March sales 520000 @ 40:10 416000 104000 April sales 61750 49400 12350 (123500*50%) (123500*40%) (123500*10%) May sales 52250 41800 (104500*50%) (104500*40%) June sales 71250 (142500*50%) Total receipts 587750 205650 125400

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