Minuteman Company\'s sales were budgeted for the first six months of its fiscal
ID: 2508695 • Letter: M
Question
Minuteman Company's sales were budgeted for the first six months of its fiscal year as follows: April $340,000 May June 420,000 550,000 July August September $390,000 360,000 480,000 Cash sales are 20 % of total sales. The remaining sales are on credit and management estimates that 55% will be collected in the month following the sale, with the remaining 45% collected the second month following the sale. 27. Cash collections during June are estimated at fill in your answer) 28. Cash collections during August are estimated at (fill in your answer) 29 What is the balance in Accounts Receivable at the beginning of June before June sales are recorded( fill in your answer) Trego Company's unit sales were budgeted for the first six months of its fiscal year as follows: March255,000 May Management wants to maintain an ending inventory equal to 8% of the next month's sales. 290,000 295,000 June July August 250,000 250,000 225,000Explanation / Answer
27.
Credit sales of April = $ 340,000 x 0.80 = $ 272,000
Credit sales of May = $ 420,000 x 0.80 = $ 336,000
Cash collection during June = 45 % of credit sales of April + 55 % credit sales of May + 20 % of June sales = 0.45 x 272,000 + 0.55 x $ 336,000 + 0.2 x $ 550,000
= $ 122,400 + $ 184,800 + $ 110,000 = $ 417,200
28.
Credit sales of June = $ 550,000 x 0.80 = $ 440,000
Credit sales of July = $ 390,000 x 0.80 = $ 312,000
Cash collection during August = 45 % of credit sales of June + 55 % credit sales of July + 20 % of August sales = 0.45 x 440,000 + 0.55 x $ 312,000 + 0.2 x $ 360,000
= $ 198,000 + $ 171,600 + $ 72,000 = $ 441,600
29.
Account receivable in June before June sales = 45 % of credit sales of April + 55 % credit sales of May
= 0.45 x 272,000 + 0.55 x $ 336,000 = $ 122,400 + $ 184,800 = $ 307,200