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Sarasota, Inc. has budgeted sales revenues as follows: June July August Credit sales $139,000 $129,000 $ 97,000 Cash sales 97,000 Total sales $236,000 259,000
Sarasota, Inc. has budgeted sales revenues as follows: June July August Credit sales $139,000 $129,000 $ 97,000 Cash sales 97,000 Total sales $236,000 259,000 $388,000 190,000 $ 287,000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted inventory purchases are as follows: June July $310,000 224,000 August 102,000 Other cash disbursements budgeted: (a) selling and administrative expenses of $50,000 each month, (b) dividends of $107,000 will be paid in July, and (c) purchase of equipment in August for $30,000 cash.
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