Solution-Compute the expected cash collections during May

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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Compute the expected cash collections during May

Reference no: EM132845626

Reference no: EM132845626

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