Reference no: EM132951168

Thomas Ltd. developed the following data for the month of July.

Cash balance, July 1st $ 1,230,000

Cash sales in July 6,000,000

Credit sales for the month of:

May 4,000,000

June 3,000,000

July 5,000,000

Purchases for the month of:

June 4,500,000

July 4,000,000

Other expenses in July:

Salaries 3,250,000

Utilities 330,000

Depreciation 1,000,000

• 70% of credit sales are collected in the month of sale, 15% in the following month, and 10% in the second month following the sale.
• 25% of purchases are paid in the month of purchase and the remaining 75% in the following month.
• 100% of other expenses are paid in the month recorded.

Required:

Problem 1: Prepare a cash collections and cash payment schedule as well as a cash budget for the month.