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 $ 99,000 $ 66,000 $ 22,000 June 118,000 90,000 26,500 July 135,000 116,000 36,000 August 135,000 75,000 30,800 The majority of Martin's sales (75 percent) are cash, but a few of the excursion companies purchase on credit. Of the credit sales, 30 percent are collected in the month of sale and 70 percent are collected in the following month. All of Martin's purchases are on account with 40 percent paid in the month of purchase and 60 percent paid the following month.
Required:
1. Determine budgeted cash collections for July and August.
2. Determine budgeted cash payments for July and August.