Cash Receipts The sales budget for Andrew Inc.

Cash Receipts The sales budget for Andrew Inc. is forecasted as follows: Month Sales Revenue May $ 170,000 June 210,000 July 230,000 August 170,000 Create a cash budget, the company must determine the budgeted cash collections from sales. Historically, the following trend has been established regarding cash collection of sales: 50 percent in the month of sale. 25 percent in the month following sale. 20 percent in the second month following sale. 5 percent uncollectible. The company gives a 2 percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $34,000, of which $10,000 represents uncollected March sales and $24,000 represents uncollected April sales. Create a schedule of budgeted cash collections from sales for May, June, and July. Include a three-month summary of estimated cash collections. Andrew, Inc. Schedule of Budgeted Cash Collections Quarterly by Months May June July Total Total Cash receipts: $Answer $Answer $Answer $Answer 2.Purchases and Cash Budgets On July 1, MTC Wholesalers had a cash balance of $175,000 and accounts payable of $99,000. Actual sales for May and June, and budgeted sales for July, August, September, and October are: Month Actual Sales Month Budgeted Sales May $150,000 July $ 90,000 June 160,000 August 80,000 September 100,000 October 120,000 All sales are on credit with 75 percent collected during the month of sale, 20 percent collected during the next month, and 5 percent collected during the second month following the month of sale. Cost of goods sold averages 70 percent of sales revenue. Ending inventory is one-half of the next month’s predicted cost of sales. The other half of the merchandise is acquired during the month of sale. All purchases are paid for in the month after purchase. Operating costs are estimated at $28,000 each month and are paid during the month incurred. Required Prepare purchases and cash budgets for July, August, and September. MTC Wholesalers Purchases Budget For the Months of July, August, and September July August September Inventory required, current sales $Answer $Answer $Answer Desired ending inventory Answer Answer Answer Total inventory needs Answer Answer Answer Less beginning inventory Answer Answer Answer Purchases