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
Paid May$95,000 $66,000 $22,000 June 120,000 88,000 26,000 July 134,000 112,000 34,000 August 132,000 74,000 31,500
The majority of Martin’s sales (65 percent) are cash, but a few of the excursion companies purchase on credit. Of the credit sales, 30 percent are collected in the month of sale and 70 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.
1.Determine budgeted cash collections for July and August.
Budgeted Cash Collections:
2. Determine budgeted cash payments for July and August.
Budgeted Cash Payments: