Moorcroft Company’s budgeted sales and direct materials purchases are as follows:

1) Month Sales April $299,000 May $337,000 June $387,000 Schedule of anticipated collections For June, 202x Cash sales in June = $387,000 x 40% = $154,800 Collections from June's credit sales = $232,200 x 20% = $46,440 May's credit sales collections = $202,200 x 50% = $101,100 April's credit sales collections = $179,400 x 26% = $46,644 Total cash collections in June = $348,984 Month DM purchases April $44,000 May $55,000 June $55,000 Schedule of expected cash outflows for direct material purchases For June, 202x Cash purchases in June = $55,000 x 50% = $27,500 Cash payments for May's purchases = $27,500 x 40% = $11,000 Cash payments for April's purchases = $22,000 x 60% = $13,200 Total cash payments in June = $51,700 2) Month Sales April $299,000 May $337,000 June $387,000 Schedule of expected collections For June, 202x Cash sales in June = $387,000 x 40% = $154,800 Collections from June's credit sales = $232,200 x 30% = $69,660 May's credit sales collections = $202,200 x 50% = $101,100 April's credit sales collections = $179,400 x 18% = $32,292 Total cash collections in June = $357,852 It would be beneficial to compensate the collector, as the 2% decline in uncollectible accounts outweighs the $1,000 they would earn. 3) Month DM purchases April $44,000 May $55,000 June $55,000 Schedule of expected cash outflows for direct material purchases For June, 202x Cash purchases in June = $55,000 x 40% = $22,000 Cash payments for May's purchases = $33,000 x 40% = $13,200 Cash payments for April's purchases = $26,400 x 60% = $15,840 Total cash payments in June = $51,040 Cash payments will see a slight reduction in June.