Budgeting Assumptions:

a$.60\%$ of sales are cash sales and $40\%$ of sales are credit sales. Twenty percent of all credit sales are collected in the month of sale

and the remaining $80\%$ are collected in the month subsequent to the sale.

b$.$ Budgeted sales for July are $$196,000.$

c$.10\%$ of merchandise inventory purchases are paid in cash at the time of the purchase. The remaining $90\%$ of purchases are credit.

purchases. All purchases on credit are paid in the month subsequent to the purchase. The accounts payable at March $31$ will be

paid in April.

d$.$ Each month's ending merchandise inventory should equal $$10,000$ plus $50\%$ of the next month's cost of goods sold.

e$.$ Depreciation expense is $$2,000$ per month. All other selling and administrative expenses are paid in full in the month the expense

is incurred.

Required:

Calculate the expected cash collections for April, May, and June.

$2$ Calculate the budgeted merchandise purchases for April, May, and June.

Calculate the expected cash disbursements for merchandise purchases for April, May, and June.

Prepare a budgeted balance sheet at June $30.($Hint: You need to calculate the cash paid for selling and administrative expenses

during April, May, and June to determine the cash balance in your June $30$ balance sheet.$)$

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

Calculate the expected cash collections for April, May, and June.