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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