Question

Tilson Corporation has projected sales and production in units for the second quarter of the coming year as follows:

	April			May		June
Sales	53,000			43,000		63,000
Production	63,000			53,000		53,000

Cash-related production costs are budgeted at $5 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $50,000 per month. The accounts payable balance on March 31 totals $182,000, which will be paid in April.

All units are sold on account for $11 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totaled $674,000 ($114,000 from February's sales and $560,000 from March’s sales).

Required:

a. Prepare a schedule for each month showing budgeted cash disbursements for Tilson Corporation.

b. Prepare a schedule for each month showing budgeted cash receipts for Tilson Corporation

Complete this question by entering your answers in the tabs below.

Required A

Prepare a schedule for each month showing budgeted cash disbursements for Tilson Corporation.

	April May June Production cost Cash disbursements: Production costs this month (40%) Production costs prior month (60%) Selling and administrative Total disbursements

Required B

Prepare a schedule for each month showing budgeted cash receipts for Tilson Corporation.

	April May June Total sales Cash receipts: February sales March sales April sales May sales June sales Total receipts

Answer 1