Compute the expected cash collections during may

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Reference no: EM132758338

Montero Corporation, a merchandising company, has provided the following budget data:

                                    ?Purchases                   Sales

January                     $42,000              $72,000

February                    48,000               66,000

March                         36,000              60,000

April                            54,000             78,000

May                              60,000           66,000

Collections from customers are normally 70% in the month of sale, 20% in the month following the sale, and 9% in the second month following the sale. The balance is expected to be uncollectible. Montero pays for purchases in the month following the purchase. Cash disbursements for expenses other than merchandise purchases are expected to be $14,400 for May. Montero's cash balance at May 1 was $22,000.

Required:

Problem a. Compute the expected cash collections during May.

Problem b. Compute the expected cash balance at May 31.

Reference no: EM132758338

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