Polk Retailers is developing cash and other budget information for July, August, and September. At June 30, Polk had cas

[answerhappygod]

Polk Retailers Is Developing Cash And Other Budget Information For July August And September At June 30 Polk Had Cas 1 (35.97 KiB) Viewed 40 times

Polk Retailers is developing cash and other budget information for July, August, and September. At June 30, Polk had cash of $7.500, accounts receivable of $538,000, inventories of $367,120, and accounts payable of $132,450. The budget is based on the following assumptions: Sales Each month's sales are billed on the last day of the month. Customers are allowed a 2% discount if payment is made within 10 days after the billing date. Receivables are booked gross, 60% of the billings are collected within the discount period, 20% are collected by the end of the month, 16% are collected by the end of the second month, and 4% prove uncollectible. Purchases 55% of all purchases of materials and selling, general and administrative expenses are paid in the month purchased and the remainder in the following month. Each month's ending inventory in units is equal to 115% of the next month's units of sales. The cost of each unit of inventory is $26. Selling, general, and administrative expenses, of which $3,500 is depreciation, are equal to 25% of the current month's sales. Actual and projected sales are as follows: Dollars Units May $537,500 10,750 June $575,000 11,500 July $540,000 10,800 August $515,000 10,300 September $545,000 10,900 October $562,500 11,250 Polk's budgeted purchases for August is: