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	$	99,000	$	65,000	$	19,000
June		125,000		94,000		26,500
July		130,000		118,000		33,500
August		130,000		71,000		29,400

The majority of Martin’s sales (65 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.

2. Determine budgeted cash payments for July and August.

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2

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

	July	August
Budgeted Cash Collections

• Required 2

Determine budgeted cash payments for July and August.

	July	August
Budgeted Cash Payments

Answer 1

Budgeted Cash Collections
	Jul	Aug
Sales	130000	130000
Type:
Cash Sales 65%	84500	84500
Credit Sales 35%	45500	45500
Collection from credit sales:
From Jun Sales	24255
From Jul Sales	13650	13650
From Aug Sales		31850
Total Cash Collection	122405	130000
Budgeted Cash Payments
	Jul	Aug
Purchases	118000	71000
Payments:
Same Month 40%	47200	28400
Next month to purchase 60%		70800
Cash Expenses	33500	29400
Total Payments	80700	128600