Reference no: EM131559656

Problem -

Martin Clothing Company is a retail company that sells hiking and other outdoor gear specially made for the desert heat. It sells to individuals as well as local companies that coordinate adventure getaways in the desert for tourists. The following information is available for several months of the current year:

Month	Sales	Purchases	Cash Expenses Paid
May	$98,000	$68,000	$19,000
June	120,000	88,000	27,000
July	135,000	117,000	36,250
August	132,000	74,000	35,000

The majority of Martin's sales (70 percent) are cash, but a few of the excursion companies purchase on credit. Of the credit sales, 35 percent are collected in the month of sale and 65 percent are collected in the following month. All of Martin's purchases are on account with 55 percent paid in the month of purchase and 45 percent paid the following month.

Required:

1. Determine budgeted cash collections for July and August.

2. Determine budgeted cash payments for July and August.