Question
Mendefera Furniture PLC (MFP) is a retail business that has established its first store in Bacchus Marsh and expanded to multiple Australian cities. The store
Mendefera Furniture PLC (MFP) is a retail business that has established its first store in Bacchus Marsh and expanded to multiple Australian cities. The store has currently signed a contract with various furniture manufacturers to purchase quality products and retails them at competitive price. Customers of MFP are located throughout Australia. Sixty percent of sales are collected in the month of sales; thirty percent is collected in the first month following sales and the remaining ten percent is collected in the second month after sales. Purchases are normally paid off in the first week of the month following purchases. MFP has never missed a discount of 2% on purchases. Other monthly cash expenses for operating activities (other than purchases) are $7,280. Budget estimates for purchases and sales covering the first four months of 2023 are given below.
Month | Purchases | Sales Revenue |
January | $56,000 | $130,000 |
February | $68,000 | $140,000 |
March | $64,000 | $128,000 |
April | $70,000 | $146,000 |
1. Calculate the total cash collections for the month of April.
2. Determine the amount of cash payments in the month of April.
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