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Question - The sales and raw materials purchases budgets of Fresax Limited are summarised as follows:
Month
May
June
July
Sales (units)
180
190
210
Sales ($)
2,160
2,280
2,520
Purchases (kg)
110
113
119
Purchases ($)
770
791
833
Fresax collects 61% of accounts receivable in the month of sale, 35% in the following month, and 4% are expected to go bad. Customers who pay within the first month of sale receive a 3% discount. Fresax settles 61% of its accounts payable in the month of purchase, and the remainder in the following month.
Required -
Calculate the expected cash collections from receivables for June.
Calculate the expected cash disbursements for June.
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