7-35 Cash Budget Consider the budgeted income statement for Carlson Company for June 20X4 in Exhibit 7-13. The cash balance, May 31, 20X4, is $15,000. Sales proceeds are colected as follows: 80% the month of sale, 10% the second month, and 10% the third month. Accounts receivable are $44,000 on May 31, 20X4, consisting of $20,000 from April sales and $24,000 from May sales. Accounts payable on May 31, 20X4, are $145,000. Carlson Company pays 25% of purchases during the month of purchase and the remainder during the following month. All operating expenses requiring cash are paid during the month of recognition, except that insur- ance and property taxes are paid annually in December for the forthcoming year. Prepare a cash budget for June. Confine your analysis to the given data. Ignore income taxes. Exhibit 7-13 Sales $290 Carlson Company Budgeted Income Statement for the Month Ended June 30, 20X4 Inventory, May 31 Purchases Available for sale Inventory, June 30 Cost of goods sold Gross margin Operating expenses Wages Uslities Advertising Depreciation Office expenses Insurance and property taxes Operating income 192 242 40 (in thousands) 202 5 8 S 36 59 $ 29

7-35 Cash Budget Consider the budgeted income statement for Carlson Company for June 20X4 in Exhibit 7-13. The cash balance, May 31, 20X4, is $15,000. Sales proceeds are colected as follows: 80% the month of sale, 10% the second month, and 10% the third month. Accounts receivable are $44,000 on May 31, 20X4, consisting of $20,000 from April sales and $24,000 from May sales. Accounts payable on May 31, 20X4, are $145,000. Carlson Company pays 25% of purchases during the month of purchase and the remainder during the following month. All operating expenses requiring cash are paid during the month of recognition, except that insur- ance and property taxes are paid annually in December for the forthcoming year. Prepare a cash budget for June. Confine your analysis to the given data. Ignore income taxes. Exhibit 7-13 Sales $290 Carlson Company Budgeted Income Statement for the Month Ended June 30, 20X4 Inventory, May 31 Purchases Available for sale Inventory, June 30 Cost of goods sold Gross margin Operating expenses Wages Uslities Advertising Depreciation Office expenses Insurance and property taxes Operating income 192 242 40 (in thousands) 202 5 8 S 36 59 $ 29

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The BRS Corporation makes collections on sales according to the following schedule: 40% in month of sale 55% in month following sale 5% in second month following sale The following sales have been budgeted: April May June Sales $110,000 $120,000 $110,000 Budgeted cash collections in June would be: Multiple Choice $115,500 $110,000 $110,550 $112,000
Cash Budget Wilson's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows: Month Sales Revenue Month Sales Revenue $300,000 March 245,000 April $200,000 155,000 January February All sales are on credit; 60 percent is collected during the month of sale, and 40 percent is collected during the next month. Cost of goods sold is 70 percent of sales. Payments for merchandise sold are made in the month following the month of sale. Operating expenses total $40,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $30,000. Prepare monthly cash budgets for February, March, and April. Use negative signs only with beginning and ending cash balances, when appropriate. Do not use negative signs with disbursement answers. Wilson's Retail Company Cash Budgets February, March, and April February March Cash balance, beginning $ Total Cash receipts Cash available Total disbursements Cash balance, ending…
Production Budget
Current Attempt in Progress Sunland Company's budgeted sales and direct materials purchases are as follows. Budgeted Sales Budgeted D.M. Purchases January $188,000 $28,200 February 206,800 33,840 March 235,000 35,720 A Sunland's sales are 30% cash and 70% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale; 4% are uncollectible. Sunland's purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchase, and 60% in the month following purchase. (a) Prepare a schedule of expected collections from customers for March. SUNLAND COMPANY Schedule of Expected Collections from Customers
Question 10 Cash Budget Daybook Inc. collects 30% of its sales on account in the month of the sale and 70% in the month following the sale. If sales on account are budgeted to be $105,000 for September and $116,000 for October, what are the budgeted cash receipts from sales on account for October?
8-19
A company's budgeted sales and cash payments for merchandise for the next two months follow. July August Budgeted sales $ 33,300 $ 42,300 Budgeted cash payments for merchandise purchases 20,510 17,540 Sales in June are $26,800. Sales are 40% cash and 60% on credit. All credit sales are collected in the month after the sale. The June 30 balance sheet includes $12,600 in cash and $2,100 in loans payable. The company requires a $12,600 minimum cash balance. The company takes loans as needed at month-end to meet this minimum balance. Interest of 1% month (based on the loan balance at the beginning of the month) is paid at each month-end. Preliminary cash balances above $12,600 at each month-end are used to repay any loans. Expenses include office salaries of $5,410 per month, rent of $3,310 per month, sales commissions at 10% of sales dollars, and shipping at 2% of sales dollars; these expenses are paid in the month incurred. Dividends of $1,160 will be paid in August. Prepare a schedule…
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Problem 01:4 ZYX has total sales for June and July of $30,000 and $25,000, respectively. Cash sales are normally 40% of total sales. Of the credit sales, 40% are collected in the same month as the sale, 50% are collected during the first month after the sale, and the remaining 10% are collected in the second month. Determine the amount of accounts receivable reported on the company's budgeted balance sheet as of July 31.
Assume a company's sales budget for July estimates 15,000 units sold. The variable selling and administrative expense used for budgeting purposes is $4.00 per unit sold. The total budgeted fixed selling and administrative expense for July is $80,000 including depreciation of $15,000. What is the total budgeted selling and administrative expense for July? Multiple Choice $120,000 $155,000 $125,000 $140,000
Problem 3- Hammerly Corporation is preparing its master budget for the quarter ending March 31 It sells a single product for $35 a unit. Budgeted sales are 60% cash and 40% on credit. All credit sales are collected in the month following the sales. Budgeted unit sales for the next four months follow: March April 1,600 1,400 Sales in units January 1,200 February 1,000 At December 31, the balance in accounts receivable is $10,000, which represents the uncollected portion of December sales. The company desires merchandise inventory equal to 20% of the next month's sales in units. The December 31 balance of merchandise inventory is 340 units, and inventory cost is $10 per unit. Use the charts on the next page to prepare the following portions of the master budget (round all dollar amounts to the nearest whole dollar) for each of the months of January, February, and March.