Waltham Corporation provided the following budgeted sales information:

Month Sales

January $210,000

February $217,500

March $195,000

April $187,500

May $180,000

The markup on products is 50% (meaning that sales are 150% of cost). Waltham desires to have ending inventory of 40% of the following months sales each month.

All sales are on account. Customers pay 60% of their balances in the month of sale, 30% in the month following sale, and 10% in the second month following sale. The company pays all invoices in the month following purchase and takes advantage of a 3% discount on all amounts due. Cash payments for operating expenses in May will be $55,000; Walthams cash balance on May 1 was $216,000.

Required:

Determine the following:

Expected cash collections during May.

Expected cash disbursements during May.

Expected cash balance on May 31.

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