Parson Corporation, a wholesaler, provided the following information:

Customers pay 60% of their balances in the month of sale, 30% in the month following sale, and 10% in the second month following sale. The company pays all invoices in the month following purchase and takes advantage of a 3% discount on all amounts due. Cash payments for operating expenses in May will be $119,500; Parson's cash balance on May 1 was $127,800.
Required:
A. Expected cash collections during May.
B. Expected cash disbursements during May.
C. Expected cash balance on May 31.

Question

Parson Corporation, a wholesaler, provided the following information:
  
Customers pay 60% of their balances in the month of sale, 30% in the month following sale, and 10% in the second month following sale. The company pays all invoices in the month following purchase and takes advantage of a 3% discount on all amounts due. Cash payments for operating expenses in May will be $119,500; Parson's cash balance on May 1 was $127,800. 
Required: 
A. Expected cash collections during May.
B. Expected cash disbursements during May.
C. Expected cash balance on May 31.

Quizplus · Accepted Answer

The Answer of Parson Corporation, a wholesaler, provided the following information:
  
Customers pay 60% of their balances in the month of sale, 30% in the month following sale, and 10% in the second month following sale. The company pays all invoices in the month following purchase and takes advantage of a 3% discount on all amounts due. Cash payments for operating expenses in May will be $119,500; Parson's cash balance on May 1 was $127,800. 
Required: 
A. Expected cash collections during May.
B. Expected cash disbursements during May.
C. Expected cash balance on May 31.

Parson Corporation, a Wholesaler, Provided the Following Information