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:MonthSalesPurchasesCash Expenses PaidMay$ 99,000$ 61,000$ 20,000June116,00089,00028,500July139,000115,00037,750August135,00073,00031,500The majority of Martin’s sales (60 percent) are cash, but a few of the excursion companies purchase on credit. Of the credit sales, 25 percent are collected in the month of sale and 75 percent are collected in the following month. All of Martin’s purchases are on account with 50 percent paid in the month of purchase and 50 percent paid the following month.Required:Determine budgeted cash collections for July and August.Determine budgeted cash payments for July and August.

Budgeted cash collections means the estimated cash which the entity expects to collect during a…

Answered: Martin Clothing Company is a retail…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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	$ 61,000	$ 20,000
June	116,000	89,000	28,500
July	139,000	115,000	37,750
August	135,000	73,000	31,500

The majority of Martin’s sales (60 percent) are cash, but a few of the excursion companies purchase on credit. Of the credit sales, 25 percent are collected in the month of sale and 75 percent are collected in the following month. All of Martin’s purchases are on account with 50 percent paid in the month of purchase and 50 percent paid the following month.