Managerial Accounting

Martin Clothing Company is a retail company that sells hiking and other outdoor gear specially made for the desert heart. It sells to individuals as well as local companies that coordinate adventure getaways in the desert for tourists. The following information is available for several months of the current year: The majority of Martin's sales (70 percent) are cash, but a few of the excursion companies purchase on credit. Of the credit sales, 45 percent are collected in the month of sale and 55 percent are collected in the following month. All of Martin's purchases are on account with 55 percent paid in the month of purchase and 45 percent paid the following month. Required: Determine budgeted cash collections for July and August. Determine budgeted cash payments for July and August. Shamrock Shades operates in mall kiosks throughout the southwestern U.S. Shamrock purchases sunglasses from bulk discounters and sells the sunglasses in the mall kiosks. Shamrock is in the process of budgeting for the coming year and has projected sales of $340,000 for January, $420,000 for February, $580,000 for March, and $620,000 for April. Shamrock's desired ending inventory is 60 percent of the following month's cost of goods sold. Cost of goods sold is expected to be 50 percent of sales. Required: Compute the required purchases for each month of the first quarter (January - March)