Valley Manufacturing Inc

Balance Sheet

June $30,2021$

Assets

Cash

Accounts receivable

Inventory

Plant and equipment, net of depreciation

Total Assets

$\backslash$table$[[$$$,140,000],[$$$,175,000],[$$$,45,200],[$$$,554,800],[$$$,915,000]]$

Liabilities and Stockholders' Equity

Accounts payable

$\backslash$table$[[$$$,115,000],[$$$,586,000],[$$$,214,000],[$$$,915,000]]$

$1$ Estimated sales for July and August are $$360,000$ and $$315,000$ respectively

$2$ Each month's sales are $20\%$ cash sales and $80\%$ credit sales. Each month's credit sales are collected $30\%$ in the month of the sale and $70\%$ in the month following the sale. All of the accounts receivable at June $30$ will be collected in July

$3$ Each month's ending inventory must equal $20\%$ of the cost of the next month's sales. The Cost of Goods Sold is $60\%$ of sales. The company pays for $40\%$ of its merchandise purchases in the month of the purchase and the remaining $60\%$ in the month following the purchase. All of the accounts payable at June $30$ will be paid in July

$4$ Monthly selling and administrative expenses are always $$75,000.$ Each month $$10,000$ of this total amount is depreciation expense and the remaining $$65,000$ relates to expenses that are paid in the month they are incurred

$5$ The company does not plan to buy or sell any plant and equipment during July. It will not borrow any money, pay any dividends, issue any common stock or repurchase any of its own common stock during July

Required:

Calculate the expected cash collections for July

Calculate the expected cash disbursements for merchandise purchases for July

Prepare a cash budget for July

Prepare a budgeted Income Statement for the month ended July $31.$ Use an absorption format.

Prepare a budgeted Balance Sheet as of July $31$

Calculate the estimated accounts receivable turnover and inventory turnover for the month of July

Calculate the estimated operating cycle for the month of July. Use $30$ days in the numerator to calculate the average collection period

Using the indirect method, calculate the estimated net cash provided by operating activities for July