Question

60 834 556 - Expected un-sales-BE sales erreny - Mary of saf in un. aunt sal phie Mix%. 6257 2015 O eng uc Mix 62 PROBLEM 3 (20 points) Caribbean Tool and Die Company's forecasted sales for April; May, June; and July are $150,000; $225.000 $180,000: and $210,000: respectively. Sales are 50% cash and 50% credit with all accounts receivables collected in the month following the sale, Cost of goods sold is 60% of sales and ending inventory is maintained at $85,000 plus 20% of the following month's cost of goods sold. All inventory purchases are paid 20% in the month of purchase and 80% in the following month. 1) What are the cash collections budgeted for June? 2) What are the budgeted cash payments in June for inventory purchases? 3) What is the balance of accounts payable on the June 30 budgeted balance sheet?

Answer 1

!)	Cash collection				June
	cash june sales (180000*50%)				90000
	Credit sales
	may sales	(225000*50%)			112500
	total cash collection for june				202500
2)	Cash payments
					May	june	july
	cost of goods sold (60%% of sales)				135000	108000	126000
	add ending inventory				106600	110200
	total needs				241600	218200
	less beginning inventory				112000	106600
	total purchases				129600	111600
	so cash payments
	may	(129600*80%)=			103680
	June	(111600*20%)=			22320
	total cash payments for june				126000	answer
3)	Balance of accounts payable june 30
	111600*80%=				89280	answer