1) NanoTech is developing cash and other budget information for May, June and July On April 30, the
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1) NanoTech is developing cash and other budget information for May, June and July On April 30, the company had cash of $10,000 accounts receivable of $75,000, and accounts payable of $100,000 The budget is to be based on the following assumptions
Each month’s sales are billed on the last day of the month The billing is collected as follows: 70% within the discount period, 15% by the end of the month, 10 % by the end of second month The rest is uncollectable Customer are allowed 2% discount if payment is made within 10 days after billing date Receivables are recorded in the accounts at their gross amounts (not net of discounts) The cost of each unit of inventory is $3 Of all purchases of merchandise and selling, general, and administrative expenses 60% is paid in the month purchased and the remainder in the following month The number of units in each months ending inventory equals 110% of next month’s units sales Selling, general, and administrative expenses, of which $5,000 is depreciation, equal 20% of current month’s sales Actual sales for March and April and projected sales for May through August are as follows:
Dollars
Units
March
$100,000
10,000
April
$110,000
11,000
May
$120,000
12,000
June
$130,000
13,000
July
$140,000
14,000
August
$150,000
15,000
Using the preceding information, compute the following amounts:
a) ( Budgeted purchases in dollars for May
b) ( Budgeted Cash Collections for May
c) ( Budgeted Cash Disbursements for June

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