Reference no: EM132666268

Question - Holiday Travel Company is a travel agency that specializes in family vacations. Holiday earned services revenue of $40,000 in May. All services are provided on account. The company expects a 20 percent increase in revenue for June. The balance in the Accounts Receivable account on May 31 was $5,000 and is budgeted to be $11,000 as of June 30. How much cash can Holiday expect to receive from customers in June?

The purchasing department manager for Holiday anticipates that $2,000 of Supplies Expense will be reported in June and $2,500 in July. Holiday's policy is to maintain an ending supplies balance equal to 10 percent of the following month's supplies expense. At May 31, Holiday had $200 worth of supplies on hand. How many dollars' worth of supplies should Holiday plan to purchase in June?

All purchases of supplies are made on account. Holiday's supplier requires that 70% of purchases be paid in the month of purchase with the remaining 30% paid in the subsequent month. At May 31, Holiday owed its suppliers $450. How much cash will Holiday be required to pay its suppliers in June?