Tilson Company Has Projected Sales and Production in Units for the Second

question 56

Essay

Tilson Company has projected sales and production in units for the second quarter of the coming year as follows:
$\begin{array}{|l|r|r|r|}\hline & \text { Apri } & \text { May } & \text { June } \\\hline \text { Sales } & 55,000 & 45,000 & 65,000 \\\hline \text { Production } & 65,000 & 55,000 & 55,000 \\\hline\end{array}$ Cash-related production costs are budgeted at $7 per unit produced.Of these production costs,40% are paid in the month in which they are incurred and the balance in the following month.Selling and administrative expenses will amount to $110,000 per month.The accounts payable balance on March 31 totals $193,000,which will be paid in April.
All units are sold on account for $16 each.Cash collections from sales are budgeted at 60% in the month of sale,30% in the month following the month of sale,and the remaining 10% in the second month following the month of sale.Accounts receivable on April 1 totalled $520,000 ($100,000 from February's sales and the remainder from March).
Required:
a)Prepare a schedule for each month showing budgeted cash disbursements for Tilson Company.
b)Prepare a schedule for each month showing budgeted cash receipts for Tilson Company.

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Definitions:

Executive Committee

A subgroup of an organization's board or leadership that makes key decisions between full board meetings or manages certain aspects of the organization's operations.

Corporate Profits

The surplus income of a corporation after all operating expenses, including taxes and interest on debt, have been deducted from total revenue.

Socially Responsible

Acting with consideration for the impact on society and the environment, often associated with ethical business practices.

Independent Directors

Board members who do not have a material or pecuniary relationship with the company, providing unbiased oversight.