14. Construct the cash budget for December- March. Anticipated sales in Column 1 and variable cash disbursements in Column 2. Sales December: $5,000 January: 15,000 February: 25,000 March: 40,000 Cash Disbursements 12,000 14,000 31,000 29,000 Thirty percent of the sales are for cash and 70 percent are on credit. Of the credit sales, 90 percent are collected one month after sale and 10 percent as collected two months after the original sale. Cash at the beginning of December $60,100, Other anticipated receipts include a $1,000 tax refund in December. Fixed cash disbursements is $3,000. The firm must retire a $25,000 loan in January. Since the $25,000 loan is retired in January, the desired level of cash will be reduced from $10,000 to $6,000 starting in February. After completing the cash budget, answer the following questions: 1. What are the firm's accounts receivable at the end of March? 2. What is the amount borrowed during February?
14. Construct the cash budget for December- March. Anticipated sales in Column 1 and variable cash disbursements in Column 2. Sales December: $5,000 January: 15,000 February: 25,000 March: 40,000 Cash Disbursements 12,000 14,000 31,000 29,000 Thirty percent of the sales are for cash and 70 percent are on credit. Of the credit sales, 90 percent are collected one month after sale and 10 percent as collected two months after the original sale. Cash at the beginning of December $60,100, Other anticipated receipts include a $1,000 tax refund in December. Fixed cash disbursements is $3,000. The firm must retire a $25,000 loan in January. Since the $25,000 loan is retired in January, the desired level of cash will be reduced from $10,000 to $6,000 starting in February. After completing the cash budget, answer the following questions: 1. What are the firm's accounts receivable at the end of March? 2. What is the amount borrowed during February?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Finance
Transcribed Image Text:14. Construct the cash budget for December- March. Anticipated sales in
Column 1 and variable cash disbursements in Column 2.
Sales
December: $5,000
January: 15,000
February: 25,000
March: 40,000
Cash Disbursements
12,000
14,000
31,000
29,000
Thirty percent of the sales are for cash and 70 percent are on credit. Of
the credit sales, 90 percent are collected one month after sale and 10
percent as collected two months after the original sale. Cash at the
beginning of December $60,100, Other anticipated receipts include a
$1,000 tax refund in December. Fixed cash disbursements is $3,000.
The firm must retire a $25,000 loan in January. Since the $25,000 loan is
retired in January, the desired level of cash will be reduced from $10,000 to
$6,000 starting in February.
After completing the cash budget, answer the following questions:
1. What are the firm's accounts receivable at the end of March?
2. What is the amount borrowed during February?
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