Montero Corporation, a merchandising company, has provided the following budget data: Collections from customers are normally 70% in the month of sale, 20% in the month following the sale, and 9% in the second month following the sale. The balance is expected to be uncollectible. Montero takes full advantage of the 2% discount allowed on purchases paid for by the tenth of the following month. Purchases for May are budgeted at 60,000 while sales for May are forecasted at 66,000. Cash disbursements for expenses other than merchandise purchases are expected to be $14,400 for May. Montero's cash balance at May 1 was $22,000. Required: a. Compute the expected cash collections during May. B. Compute the expected cash disbursements in May b. Compute the expected cash balance at May 31.
Montero Corporation, a merchandising company, has provided the following budget data:
Collections from customers are normally 70% in the month of sale, 20% in the month following the sale, and 9% in the second month following the sale. The balance is expected to be uncollectible.
Montero takes full advantage of the 2% discount allowed on purchases paid for by the tenth of the following month. Purchases for May are budgeted at 60,000 while sales for May are
Cash disbursements for expenses other than merchandise purchases are expected to be $14,400 for May. Montero's cash balance at May 1 was $22,000.
Required:
a. Compute the expected cash collections during May.
B. Compute the expected cash disbursements in May
b. Compute the expected cash balance at May 31.
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