Powerdyne Company’s cost of goods sold is consistently 60% of sales. The company plans to carry ending merchandise inventory for each month equal to 40% of the next month’s budgeted cost of goods sold. All merchandise is purchased on credit, and 50% of the purchases made during a month is paid for in that month. Another 35% is paid for during the first month after purchase, and the remaining 15% is paid for during the second month after purchase.

Expected dollar sales are:
August (actual), \$150,000
September (actual), \$350,000
October (estimated), \$200,000
November (estimated) \$300,000.

Use this information to determine October’s expected cash payments for purchases.

IV. Budgeted Cash Receipts
Emily Company has sales on account and sales for cash. Specifically, 60% of its sales are on account and 40% are for cash. Credit sales are collected in full in the month following the sale. The company forecasts sales of \$525,000 for April, \$535,000 for May, and \$560,000 for June. The beginning balance of Accounts Receivable on April 1 is \$300,000.

Powerdyne Company’s cost of goods sold is consistently 60% of sales. The company plans to carry ending merchandise inventory for each month equal to 40% of the next month’s budgeted cost of goods sold. All merchandise is purchased on credit, and 50% of the purchases made during a month is paid for in that month. Another 35% is paid for during the first month after purchase, and the remaining 15% is paid for during the second month after purchase.

Expected dollar sales are:
August (actual), \$150,000
September (actual), \$350,000
October (estimated), \$200,000
November (estimated) \$300,000.

Use this information to determine October’s expected cash payments for purchases.

IV. Budgeted Cash Receipts
Emily Company has sales on account and sales for cash. Specifically, 60% of its sales are on account and 40% are for cash. Credit sales are collected in full in the month following the sale. The company forecasts sales of \$525,000 for April, \$535,000 for May, and \$560,000 for June. The beginning balance of Accounts Receivable on April 1 is \$300,000.