Q.1

Schedule of Cash Collections on Accounts Receivable and Cash Budget

Roybal Inc. sells all of its product on account. Roybal has the following accounts receivable payment experience:

Percent paid in the month of sale	20
Percent paid in the month after the sale	55
Percent paid in the second month after the sale	23

To encourage payment in the month of sale, Roybal gives a 2% cash discount. Roybal's anticipated sales for the next few months are as follows:

April	$237,500
May	310,000
June	325,000
July	300,000
August	375,000

Required:

1. Prepare a schedule of cash receipts for July. Be sure to enter percentages as whole numbers.

Roybal Inc. Schedule of Cash Receipts For July
Payments on account:
From May credit sales:
$ %				$
From June credit sales:
$ %
From July credit sales:
$ %
Less: July cash discount
$ %
Cash receipts				$

2. Prepare a schedule of cash receipts for August. Be sure to enter percentages as whole numbers.

Roybal Inc. Schedule of Cash Receipts For August
Payments on account:
From June credit sales:
$ %				$
From July credit sales:
$ %
From August credit sales:
$ %
Less: August cash discount
$ %
Cash receipts				$

Q.2

Cash Payments Schedule

Fein Company provided the following information relating to cash payments:

Fein purchased direct materials on account in the following amounts:

June	$68,000
July	77,000
August	73,000

Fein pays 20% of accounts payable in the month of purchase and the remaining 80% in the following month.

In July, direct labor cost was $35,300. August direct labor cost was $35,400. The company finds that typically 90% of direct labor cost is paid in cash during the month, with the remainder paid in the following month.

August overhead amounted to $77,200, including $6,350 of depreciation.

Fein had taken out a four-month loan of $18,000 on May 1. Interest, due with payment of principal, accrued at the rate of 9% per year. The loan and all interest were repaid on August 31. (Note: Use whole months to compute interest payment.)

Required:

Prepare a schedule of cash payments for Fein Company for the month of August. Be sure to enter percentages as whole numbers.

Fein Company Schedule of Cash Payments For August
				August
Payments on accounts payable:
From July purchases
$ %				$
From August purchases
$ %
Direct labor payments:
From July
$ %
From August
$ %
Overhead
Loan repayment
Cash payments				$