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	$	92,000	$	66,000	$	20,000
June		125,000		89,000		29,000
July		137,000		112,000		34,250
August		127,000		77,000		33,600

The majority of Martin’s sales (70 percent) are cash, but a few of the excursion companies purchase on credit. Of the credit sales, 35 percent are collected in the month of sale and 65 percent are collected in the following month. All of Martin’s purchases are on account with 45 percent paid in the month of purchase and 55 percent paid the following month.

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

  

2. Determine budgeted cash payments for July and August.

Answer 1

If you have any doubts please comment on the answer.