Compute the cash receipts and cash disbursements

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Reference no: EM13356295

Compute the cash Receipts and cash disbursements schedule.

Tilson Company has projected sales and production in units for the second quarter of the coming year as follows:

	April	May	June
Sales	55,000	45,000	65,000
Production	65,000	55,000	55,000

Cash-related production costs are budgeted at $7 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $110,000 per month. The accounts payable balance on March 31 totals $193,000, which will be paid in April.
All units are sold on account for $16 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totaled $520,000 $(100,000 from February's sales and the remainder from March).

Required:

a. Prepare a schedule for each month showing budgeted cash disbursements for the Tilson Company.

b. Prepare a schedule for each month showing budgeted cash receipts for Tilson Company.

Reference no: EM13356295

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