The following information is from Tejas WindowTints financial records, Month Sales Purchases April $75,000 $50,000 May...

The following information is from Tejas WindowTints financial records,

Month	Sales	Purchases
April	$75,000	$50,000
May	75,000	60,000
June	71,000	48,000
July	78,000	66,000

Collections from customers are normally 66 percent in the month of sale, 17 percent in the month following sale and 16 percent in the second month following the sale. The balance is expected to be uncollectible. All purchases are on account. Management takes full advantage of the 1 percent discount allowed on purchases paid by the tenth of the following month. Purchases for August are budgeted at $62,000 and sales for August are forecasted at $68,000. Cash disbursements for expenses are expected to be $14,800 for the month of August. The company cash balance on August 1 was $34,000.

REQUIRED:

1. Prepare the expected cash collections during August.

2. Prepare the expected cash disbursements during August.

3. Calculate the expected cash balance on August 31.

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Expert Solution

ekkarill92 answered 1 year ago

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