Compute the expected cash collections during May

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Reference no: EM132845626

Question - Fonsey Corporation, a merchandising company, has provided the following budget data:

Month

Purchases

Sales

January

$39,500

$69,000

February

47,200

65,900

March

37,500

61,200

April

54,000

79,850

May

59,500

72,600

Collections from customers are normally 60% in the month of sale, 17% in the month following the sale, and 20% in the second month following the sale. It is expected that the balance be uncollectible. Fonsey pays for purchases in the month following the purchase. Cash disbursements for expenses other than merchandise purchases are expected to be $13,800 for May. Fonsey's cash balance on May 1 was $27,500.

Required -

1. Compute the expected cash collections during May.

2. Compute the expected cash balance on May 31.

Reference no: EM132845626

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