3. A. Cash Collection Budgeted sales for the third quarter of the year for Brown Company are as follows: Cash Collection June July August September Budgeted Sales $350,000 $300,000 375,000 450,000 Total Cash Collected July lung August The company normally collects 30 percent in the month of sale and 65 percent in the month following the sale. Five percent of all sales are uncollectible and are written off in the following month. B. Cash Payment Schedule for Raw Material Purchases Budgeted Purchases july The balance in accounts receivable at July 1 was $245,000, which represents 70 percent of June sales. Required: Determine cash collection for July, August, & Sept. September CASH PAYMENT aug Sept
3. A. Cash Collection Budgeted sales for the third quarter of the year for Brown Company are as follows: Cash Collection June July August September Budgeted Sales $350,000 $300,000 375,000 450,000 Total Cash Collected July lung August The company normally collects 30 percent in the month of sale and 65 percent in the month following the sale. Five percent of all sales are uncollectible and are written off in the following month. B. Cash Payment Schedule for Raw Material Purchases Budgeted Purchases july The balance in accounts receivable at July 1 was $245,000, which represents 70 percent of June sales. Required: Determine cash collection for July, August, & Sept. September CASH PAYMENT aug Sept
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Finance
answer question b)
Transcribed Image Text:3. A. Cash Collection
Budgeted sales for the third quarter of the year for Brown Company are as follows:
Cash Collection
June
July
August
September
Budgeted Sales
$350,000
$300,000
375,000
450,000
Total Cash Collected
July
June
July
August
September
The company normally collects 30 percent in the month of sale and 65 percent in the month
following the sale. Five percent of all sales are uncollectible and are written off in the following
month.
B. Cash Payment Schedule for Raw Material Purchases
Budgeted Purchases
july
August
The balance in accounts receivable at July 1 was $245,000, which represents 70 percent of June
sales.
Required: Determine cash collection for July, August, & Sept.
$168,000
354,000
472,000
September
CASH PAYMENT
aug
Sept
The company normally pays for 70% of its purchases in the month of purchase. The remaining 30% is
paid in the following month.
Instructions:
Prepare a schedule of cash payments on accounts payable for each month and in total for the first
quarter.
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