Star Co. was organized on August 1 of the current year. Projected sales for the next three months are as follows:
August
$250,000
September
200,000
October
275,000
The company expects to sell 50% of its merchandise for cash. Of the sales on account, 30% are expected to be collected in the month of the sale and the remainder in the following month.
Prepare a schedule indicating cash collections for August, September, and October.
Gilbert’s expects its September sales to be 20% higher than its August sales of $150,000. Manufacturing costs were $100,000 in August and are expected to be $120,000 in September. All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month. Payments of manufacturing costs are as follows: 25% in the month of production and 75% in the following month. The beginning cash balance on September 1 is $7,500. The ending balance on September 30 would be? Show all calculations.
