The following data was available from OPZ Corporation's books: 2021 Purchases Sales January February P 42,000 48,000 P 72,000 66,000 March 36,000 60,000 April 54,000 78,000 Collections from customers are normally 70% in the month of sale, 20% in the month following the sale, and 9% in the second month following the sale and the balance is uncollectible. OPZ takes full advantage of the 2% discount allowed on purchases paid for by the tenth of the following month. Purchases for May are budgeted at P60,000, while sales for May are forecasted at P66,000. Cash disbursements for expenses are expected to be P14,000 for the month of May. OPZ's cash balance at May 1 was P22,000.
The following data was available from OPZ Corporation's books: 2021 Purchases Sales January February P 42,000 48,000 P 72,000 66,000 March 36,000 60,000 April 54,000 78,000 Collections from customers are normally 70% in the month of sale, 20% in the month following the sale, and 9% in the second month following the sale and the balance is uncollectible. OPZ takes full advantage of the 2% discount allowed on purchases paid for by the tenth of the following month. Purchases for May are budgeted at P60,000, while sales for May are forecasted at P66,000. Cash disbursements for expenses are expected to be P14,000 for the month of May. OPZ's cash balance at May 1 was P22,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
1. What is the expected cash collection for May?
2. What is the expected cash disbursements in May?
3. What is the expected cash balance at May 31?
Transcribed Image Text:The following data was available from OPZ Corporation's books:
2021
Purchases
Sales
P 72,000
66,000
60,000
78,000
P 42,000
January
February
48,000
March
36,000
54,000
April
Collections from customers are normally 70% in the month of sale, 20% in the month following the sale,
and 9% in the second month following the sale and the balance is uncollectible.
OPZ takes full advantage of the 2% discount allowed on purchases paid for by the tenth of the following
month. Purchases for May are budgeted at P60,000, while sales for May are forecasted at P66,000.
Cash disbursements for expenses are expected to be P14,000 for the month of May. OPZ's cash balance
at May 1 was P22,000.
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