a.

Schedule of expected cash collections

April May June Quarter
Accounts Receivable(3/31) $48,000 $48,000
April sales
($70,000*20%; $70,000*80%) 14,000 $56,000
May sales
($85,000*20%; $85,000*80%) 17,000 $68,000
June sales
($90,000*20%) 18,000
Total cash collections $62,000 $73,000 $86,000 $221,000

b. Cost of goods sold in July = $50,000 - $50,000*40% = $30,000

Value of ending inventory at the end of June = $30,000*30% = $9,000

c. Beginning inventory of April = $12,600

Cost of goods sold in April = $70,000 - $70,000*40% = $42,000
Ending inventory of April = ($85,000 - $85,000*40%)*30% = $15,300
Inventory purchases in April = $42,000 + $15,300 - $12,600 = $44,700

d. Beginning inventory of May = $15,300

Cost of goods sold in May = $85,000 – $85,000*40% = $51,000
Ending inventory of May = ($90,000 - $90,000*40%)*30% = $16,200
Inventory purchases in May = $51,000 + $16,200 - $15,300 = $51,900
Cash disbursements for inventory purchases in May = $44,700*50% + $51,900*50% = $48,300
e.
Cash disbursements for operating expenses in April = $7,500 + $70,000*6% + $6,000 + $70,000*4%
= $20,500

f.
Total cash disbursement for inventory purchases in April = $18,300 + $44,700*50% = $40,650
April
Beginning cash balance $9,000
Add cash receipts:
Collections from customers 62,000
Total cash available 71,000
Less cash disbursements:
Inventory purchases 40,650
Selling & Administrative 20,500
Equipment purchases 11,500
Total cash disbursements 72,650
Excess(deficiency) of cash available ($1,650)
Over disbursements
Finacing:
Borrowing 10,000
Repayment -
Interest -
Total financing 10,000
Ending cash balance in April $8,350