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For the second quarter of the following year Cloaks Company has projected sales and production in units as follows: Jan Feb Mar Sales 49,000 51,000 56,000 Production 53,000...

For the second quarter of the following year Cloaks Company has projected sales and production in units as follows:

Jan

Feb

Mar

Sales

49,000

51,000

56,000

Production

53,000

48,000

49,000

Cash-related production costs are budgeted at $7 per unit produced. Of these production costs, 35% are paid in the month in which they are incurred and the balance in the next month. $95,000 per month will account for Selling and administrative expenses. On January 31 the accounts payable balance totals $185,000, which will be paid in Feb.

All units are sold on account for $13 each. Cash collections from sales are budgeted at 55% in the month of sale, 25% in the month following the month of sale, and the remaining 20% in the second month following the month of sale. On January 1 accounts receivable totaled $500,000 ($90,000 from November’s sales and the remaining from January).

Required:

1)     Prepare a schedule for each month showing budgeted cash disbursements for Cloaks Company.

2)     Prepare a schedule for each month showing budgeted cash receipts for Cloaks Company.

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ReportAnswer #1

Febru March Janua Units sold 49,000 51,000 56,000 $ 13.00 $13.00 13.00 663,000 728,000 Selling price per unit $ 637,000 Total

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