Cash Receipts Budget

Colecta Company wants to determine the expected monthly cash receipts during the last quarter of the current year.The cash receipts are expected to come mainly from cash sales and collection of accounts receivable.

Based on the company's experience, total sales consist of 30% cash, the balance is on account.Collection of accounts receivable follows this pattern.

50% in the month of sale

30% in the month following the month of sale

18% in the second month following the month of sale

2% uncollectible

Actual and projected sales were given as follows:

July 350,000

August 420,000

September 380,000

October 530,000

November 610,000

December 750,000

In October, the company expects to finalize its negotiations for the sale of its piece of land at three times its book value of 250,000.

Before ethe end of the current month, it was learned that a customer, deemed by the company's management to have died already because of about a year's absence, is still alive.The customer owes Colecta company an amount of 50,000 which has already been written off from the accounts.

Required:Prepare schedule of projected monthly cash receipts for the last quarter of the current year.

Problem 2:The following information was available from Kadune Corporation's books:

2020 Purchases Sales

January 42,000 72,000

February 48,000 66,000

March 36,000 60,000

April 54,000 78,000

Collections from customers are normally 70% in the month of sale, 20% in the month following the sale, and 9% in the second month following the sale.The balance is expected to be uncollectible.Kadune takes full advantage of the 2% discount allowed on purchases paid for by the tenth of the following month.Purchases for May are budgeted at 60,000, while sales for May are forecasted at 66,000.Cash disbursements for expenses are expected to be 14,400 for the month of May.Kadune's cash balance at May 1 was 22,000.

Required:Prepare the following schedules:

1. Expected cash collections during May

2. Expected cash disbursements during May