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 $ 95,000 $ 62,000 $ 22,000 June 119,000 87,000 28,500 July 133,000 118,000 33,750 August 127,000 71,000 33,600 The majority of Martin’s sales (60 percent) are cash, but a few of the excursion companies purchase on credit. Of the credit sales, 45 percent are collected in the month of sale and 55 percent are collected in the following month. All of Martin’s purchases are on account with 50 percent paid in the month of purchase and 50 percent paid the following month. Required: 1. Determine budgeted cash collections for July and August. 2. Determine budgeted cash payments for July and August.
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 | $ | 95,000 | $ | 62,000 | $ | 22,000 |
| June | 119,000 | 87,000 | 28,500 | |||
| July | 133,000 | 118,000 | 33,750 | |||
| August | 127,000 | 71,000 | 33,600 | |||
The majority of Martin’s sales (60 percent) are cash, but a few of the excursion companies purchase on credit. Of the credit sales, 45 percent are collected in the month of sale and 55 percent are collected in the following month. All of Martin’s purchases are on account with 50 percent paid in the month of purchase and 50 percent paid the following month.
Required:
1. Determine budgeted cash collections for July and August.
2. Determine budgeted cash payments for July and August.
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