Xyz inc had actual sales of 150000 in february and 160000

Reference no: EM13598873

XYZ, Inc. had actual sales of $150,000 in February and $160,000 in March. The firm's managers estimate that sales in April, May, June and July will be $175,000, $180,000, $185,000, and $190,000, respectively. Purchases are 40% of the next month's sales. Sales receipt patterns indicate that 60% of sales are received the same month as the sale. 30% are collected one month later and 10% are collected two months later. 50% of purchases are paid in the same month as the purchase and 50% are paid the following month. Assume that the firm has no other charges (either in Accounts Receivable or Accounts Payable) during these months.

a. Compute cash receipts from sales and cash payments from purchases in April, May and June (doing each month separately and showing your work).

b. What is the estimated Accounts Payable balance on June 30?

c. Extra credit (1 point) What is the estimated Accounts Receivablebalance on June 30?

Reference no: EM13598873

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