Millen corporation is a merchandizer
Homework Answers
Requirement a - Expected Cash Collections for July
| Cash Sales for July ($310,000 x 20%) | $62,000 |
| Credit sales for July month, collected in July ($310,000 x 80% x 30%) | $74,400 |
Credit sales of June month, collected in July ( Account receivable on June 30) | $166,000 |
| Expected Cash collection in July | $302,400 |
Requirement b -
Purchase Budget for july
| COGS (60% of sales i.e $310,000) | $186,000 |
| Add - Closing Inventory for july ( 60% x $3,000 x 20%) | $39,600 |
| Less - Opening Inventory for july ( ending Inventory on June 30) | (37,200) |
| Purchases During July | $188,400 |
Expected Cash disbursement for July
| Account payable as on 30th june , paid in july | $93,000 |
| Credit purchases for july, paid in july ( $188,400 x 40%) | $75,360 |
| Total | $168,360 |
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