Martin Clothing Company is a retail company that sells hiking and other outdoor gear specially...
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Accounting
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
$
98,000
$
67,000
$
24,000
June
117,000
89,000
24,500
July
138,000
110,000
36,000
August
132,000
75,000
30,100
The majority of Martins sales (70 percent) are cash, but a few of the excursion companies purchase on credit. Of the credit sales, 40 percent are collected in the month of sale and 60 percent are collected in the following month. All of Martins 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.
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