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The management accountant at Genus Manufacturing Company, Karen Cranston, is in the process of...

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Accounting

The management accountant at Genus Manufacturing Company, Karen Cranston, is in the
process of preparing the cash budget for the business for the second quarter of 2020. Extracts
from the sales and purchases budgets are as follows:
i) An analysis of the records shows that trade receivables (accounts receivable) are
settled according to the following credit pattern, in accordance with the credit terms
5/30, n90:
50% in the month of sale
30% in the first month following the sale
20% in the second month following the sale
ii) Accounts payable are settled as follows:
60% in the month in which the inventory is purchased
40% in the following month
The credit terms of the suppliers -4/30,n60.
iii) Computer Equipment costing $280,000 will be purchased and paid for in June 2020.
iv) During June, the management of Genus Manufacturing Company expects to sell an old
motor vehicle that cost $500,000 at a gain of $60,000. Accumulated depreciation on this
motor vehicle at that time is expected to be $360,000. The employee will be allowed to
pay a deposit equal to 65% of the selling price in June and the balance settled in two
equal amounts in July & August of 2020.
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