DeVry University ACCT346 Weekly Assignment- ANSWERS Week 6

1. Cave Hardware's forecasted sales for April, May, June, and July are 200,000, 230,000, 190,000, and 240,000, respectively. Sales are 65% cash and 35% credit, with all accounts receivable collected in the month following the sale. Cost of goods sold is 75% of sales and ending inventory is maintained at 60,000 plus 10% of the following month's cost of goods sold. All inventory purchases are paid 22% in the month of purchase and 78% in the following month.

What are the total cash collections budgeted for June?

Answer:

    Total Cash Collections expected in June
     June cash sales  May credit sales (receivables later collected during June)
     (190,000  )  (230,000  )
     123,500  80,500
     204,000

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