Prepare a schedule for each month showing budgeted cash

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Reference no: EM133013143

Question - Tony Stark and Company has projected sales and production in units for the second quarter of the coming year as follows:

 

April

May

June

Sales

50,000

40,000

60,000

Production

60,000

50,000

50,000

Cash-related production costs are budgeted at $6 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $150,000 per month. The accounts payable balance on March 31 totals $250,000, which will be paid in April.

All units are sold on account for $15 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totaled $900,000 ($100,000 from February's sales and the remainder from March).

Required -

a. Prepare a schedule for each month showing budgeted cash disbursements for Clay Company.

b. Prepare a schedule for each month showing budgeted cash receipts for Clay Company.

Reference no: EM133013143

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