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Soto Supplies Ltd sells carry bags for laptop computers. John Birt is responsible for preparing Soto Supplies master budget, and he has assembled the data

Soto Supplies Ltd sells carry bags for laptop computers. John Birt is responsible for preparing Soto Supplies master budget, and he has assembled the data below for May and June 2020.

May ($)

June ($)

Cash sales

6,000

5,000

Credit sales

49,000

56,000

Credit purchases

32,000

36,000

Wages expense

12,000

13,200

Rent expense

1,200

1,200

Other miscellaneous expenses

3,200

2,400

Cost of sales

30,600

33,000

Depreciation expense

6,200

6,000

Cash proceeds from the sale of old machinery

2,000

Payment of dividends

6,000

  • Collections from debtors (accounts receivable) normally have the following pattern: 30 per cent in the month of sale, 60 per cent in the month following the sale, and 10 per cent in the second month following the sale.
  • Credit sales in March and April were $52,000 and $44,000 respectively.
  • Credit purchases are paid for in the month following the purchase. Credit purchases in April were $34,000.
  • The company plans to repay as much as the company can of a loan in June but leaving an ending cash balance at the end of June of $4,000. The payment of this loan must be included in the cash budget in June.
  • The cash balance at 1st May was $4,000.
  • Wages, rent and other miscellaneous expenses are paid in the month in which the expense arises.

  1. Prepare a schedule of estimated receipts from debtors (accounts receivable) for the months of May and June.

Month of cash collection

Month

Credit Sales

May

June

What is the amount of accounts receivable at 30th June?

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