A manufacturing company's budgeted sales and cash payments for the next two months follow.

April May

Budgeted sales $ $66,800$ $ $82,800$

Budgeted cash payments for

Direct materials $15,28013,280$

Direct labor $4,4804,080$

Overhead $20,90017,500$

March sales were $$59,050.$ Sales are $80\%$ on credit and $20\%$ for cash. All credit sales are collected in full in the month after the sale. The March $31$ balance sheet includes $$16,400$ in cash and $$5,000$ in loans payable. The company requires a $$16,400$ minimum cash balance, and it takes loans as needed at month$-$end to meet this minimum balance. Interest of $1\%$ month $($based on the loan balance at the beginning of the month$)$ is paid at each month$-$end. Preliminary cash balances above $$16,400$ at the end of each month are used to repay loans. Expenses include office salaries of $$4,280$ per month, rent of $$6,780$ per month, and sales commissions of $10\%$ of sales dollars; these expenses are paid in the month incurred. Prepare a schedule of cash receipts for April and May and prepare a cash budget for April and May.

Answer rating: 100% (QA)

To prepare a schedule of cash receipts for April and May we need to calculate the cash collections f... View the full answer