The following information is from Tejas WindowTint’s financial records.
Month Sales Purchases
April ........................... $72,000 ............................................................ $42,000
May ............................. 66,000 ............................................................ 48,000
June ............................ 60,000 ............................................................ 36,000
July .............................. 78,000 ............................................................ 54,000
Collections from customers are normally 70 percent in the month of sale, 20 percent in the month following the sale, and 9 percent in the second month following the sale. The balance is expected to be uncollectible. All purchases are on account. Management takes full advantage of the 2 percent discount allowed on purchases paid for by the tenth of the following month. Purchases for August are budgeted at $60,000, and sales for August are forecasted at $66,000. Cash disbursements for expenses are expected to be $14,400 for the month of August. The company’s cash balance on August 1 was $22,000.
Required: Prepare the following schedules.
1. Expected cash collections during August.
2. Expected cash disbursements during August.
3. Expected cash balance on August 31.