2 Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July 3 Each momth's ending inventory must equal 20% of the cost of the next month's sales. The cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July 4 Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred 5 The company does not plan to buy or sell any plant and equipment during July. It will not borrow any money, pay any dividends, issue any common stock or repurchase any of its own common stock during July Required: 1. Calculate the expected cash collections for July 2. Calculate the expected cash disbursements for merchandise purchases for July 3. Prepare a cash budget for July 4. Prepare a budgeted Income Statement for the month ended July 31. Use an absorption format. 5. Prepare a budgeted Balance Sheet as of July 31 6. Calculate the estimated accounts receivable turnover and inventory turnover for the month of July 7. Calculate the estimated operating cycle for the month of July. Use 30 days in the numerator to calculate the average collection period 8. Using the indirect method, calculate the estimated net cash provided by operating activities for July Provide the support calculations for your answers in the area below. For example 10,000+20,000+30,000=60,000 6a Calculate estimated Accounts receivable turnover for July (round to 3 decimal places) 6b Calculate estimated Inventory turnover for July (round to 3 decimal places) 7 Calculate estimated Operating Cycle for July- use 30 days in numerator to calculate the average collection period and average sales period (round to 3 decimal places) 8 2 Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July 3 Each momth's ending inventory must equal 20% of the cost of the next month's sales. The cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July 4 Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred 5 The company does not plan to buy or sell any plant and equipment during July. It will not borrow any money, pay any dividends, issue any common stock or repurchase any of its own common stock during July Required: 1. Calculate the expected cash collections for July 2. Calculate the expected cash disbursements for merchandise purchases for July 3. Prepare a cash budget for July 4. Prepare a budgeted Income Statement for the month ended July 31. Use an absorption format. 5. Prepare a budgeted Balance Sheet as of July 31 6. Calculate the estimated accounts receivable turnover and inventory turnover for the month of July 7. Calculate the estimated operating cycle for the month of July. Use 30 days in the numerator to calculate the average collection period 8. Using the indirect method, calculate the estimated net cash provided by operating activities for July Provide the support calculations for your answers in the area below. For example 10,000+20,000+30,000=60,000 6a Calculate estimated Accounts receivable turnover for July (round to 3 decimal places) 6b Calculate estimated Inventory turnover for July (round to 3 decimal places) 7 Calculate estimated Operating Cycle for July- use 30 days in numerator to calculate the average collection period and average sales period (round to 3 decimal places) 8