A firm has projected sales in October, November, and December of P10,000, P20,000, and P30,000, respectively. The firm makes 20% of sales for cash and collects the balance one month following the sale. What is the firm’s total cash receipts in December? P18,000 P20,000 P22,000 P24,000

A firm has projected sales in October, November, and December of P10,000, P20,000, and P30,000, respectively. The firm makes 20% of sales for cash and collects the balance one month following the sale. What is the firm’s total cash receipts in December? P18,000 P20,000 P22,000 P24,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: X Pvt. Ltd. is a Canadian company and wishes to evaluate its cash conversion cycle (CCC). Your…

A: The question is related to Operating Cycle and Cash Operating Cycle. 1. Operating Cycle :-The…

Q: C. Exodus Corp. is analyzing the performance of its cash management. On the average, the firm holds…

A: Cash conversion cycle in the business mean the period in which raw material and other resources…

Q: Air corporation has the following projected sales: P958,450.00 (October) P1,001,515.00 (November)…

A: Cash budget is one of the important budget being prepared in the business. It shows expected cash…

Q: Q4: Aztec Products wishes to evaluate its cash conversion cycle (CCC). Research by one of the firm's…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: Setia Sdn Bhd had cash of RM13,000 on hand together with trade debtors' outstanding balance of…

A: Budgeting: It is a process of planning the work to be performed. Under this process a formal plan is…

Q: The Corado Company has predicted sales for the first three quarters of 2024. The predictions are: 1…

A: The objective of the question is to calculate the expected cash inflows for the Corado Company in…

Q: The Bandon Pine Corporation's purchases from suppliers in a quarter are equal to 65 percent of the…

A: Cash outlays:Cash outlays refer to the actual expenditures made by an individual or entity for a…

Q: Estimated sales for the next four months are as follows (in $ million): Month Cash sales Credit…

A: In accounting we often make cash budgets. A cash budget is a budget or a document that shows the…

Q: All of the following are examples of assurance services except: a. Financial engagement. b.…

A: Assurance services are a type of independent professional service usually provided by certified or…

Q: mekmek Corporation uses the Baumol Cash Model to determine its optimal cash balance. For the coming…

A: SOLUTION- BAUMOLS MODEL IS ONE OF THE CASH MANAGEMENT MODELS WHICH IS USED TO DECIDE HOW MUCH CASH…

Q: Golden Diamond Jeweler Inc is currently forecasting a revenue of Php2,000,000, Php3,200,000 and…

A: A cash budget is a determination of the cash flows of a company's business transactions over a…

Q: Here is a forecast of sales by National Bromide for the first 4 months of 2019 (figures in thousands…

A: Cash collection refers to the amount that is collected form the customer after selling goods and…

Q: 3. Nirmala Textile is planning to purchase raw materials on lst January 2021 and the payment will be…

A: Cash sales are the total sales revenue generated from selling the product against instant receipt of…

Q: Sexton Corporation has projected the following sales for the coming year: Sales Q1 $ 300 Q2 Q3 Q4 $…

A: A. Pays immediatelyThe payables period in this case Is 0. For the main reason that the company pays…

Q: Frank's Sporting Goods projects sales for the second quarter of 200X to be as follows:…

A: Schedule of cash receipts is made to ascertain the amount received in the particular months.

Q: As an example, say a company expects $1M in May sales and they forecasted they would receive $500k…

A: Cash budget is one of the useful budget being prepared in business. It shows all cash receipts and…

Q: Here is a forecast of sales by National Bromide for the first 4 months of 2019 (figures in thousands…

A: Let Si and CSi represent the cash sales and credit sales respectively in the month i. Hence,…

Q: Assume that your credit sales for March was $16,288,for April was $33,301 and May was $29,261. If…

A: The cash budget is prepared to know the estimated cash receipt and cash expenses. it helps in the…

Q: Your company collected $304.00 million and spent $377.00 million this month. If previous month's…

A: The cash balance at the end of the month is a function of collections and disbursements made during…

Q: The Bruin Corporation's purchases from suppliers in a quarter are equal to 70 percent of the next…

A: 1. Payment of AccountsSince the payables period is 60 days, we can assume that Bruin pays for its…

Q: A CARDBOARD BOX FACTORY pays its suppliers 40 days after making the purchase and receiving the…

A: The question is related to Operating cycle in Working Capital Management. Since you have posted a…

Q: Carl Company Limited is a wholesale company that deals in general goods. The following information…

A: Cash Budget: This is a budget which depicts the expected cash inflows and out flows during a period…

Q: Wildcat's purchases from suppliers in a quarter are equal to rter's forecast sales, and suppliers…

A: Quarter 1 (Q1):Beginning Cash Balance: Given as -$54.00 million.Net Cash Inflow:Sales Revenue: $170…

Q: PT AWOL has sales projections (in million rupiahs) for the following four quarters: Q1 Q2 Q3 Q4…

A: A cash budget is prepared to present all the expected receipts, payments, and the cash balance at…

Q: AXE Co. expects to have sales of P30,000 in January, P33,000 in February, and P38,000 in March. If…

A: Credit sales are the sales in which the corporation does not get the receipts from the sales of…

Q: A firm has projected sales in May, June, and July of P10,000, P20,000, and P30,000, respectively.…

A: Usually, the Firm needs to assess the cash position to assess the cash requirement from time to…

Q: Miggy Co. projects the following monthly revenues for next year: 100,000 500,000 452,000 450,000…

A: Formula: Cash collection amount : Credit sales x cash collection %

Q: (16-11) Cash Conversion Negus Enterprises has an inventory conversion period of 50 days, an average…

A: Number of days 365 Days Divided by: Average collection period 35 Days Accounts receivable…

Q: lion company expects $650,000 of credit sales in march and $800,000 of credit sales in april. lion…

A: The cash budget keeps the records of cash requirements in the business.

Q: Calculating Cash Collections Pindado SA has projected the following quarterly sales amounts for the…

A: (a) 45-day collection period: (b) 60-day collection period: (c) 30-day collection period:…

Q: ; 80% of Nadak's accounts receivable are paid within the discount period. Required: a. What is…

A: Given : Annual credit sales total $337.3 million. 2.25% cash discount for payment within 10 days…

Q: Golden Sun Company had sales of Tk.95,000 in December. It expects sales of Tk.70,000 in January.…

A: A cash budget is the estimation of cash inflow and cash outflow during a particular period. A cash…

Q: Here is a forecast of sales by National Bromide for the first 4 months of 2022 (figures in thousands…

A: Budgeting is a technique of estimating future sales, expenses, receipts and payments on the basis of…

Q: BMC Co. has an average A/R balance of P1,250,000, average inventory balance of P1,750,000, and…

A: Cash conversion cycle helps in measuring how long a company will be deprived of cash if in order to…

Q: Tommy Textiles Limited estimates that it takes the company 27 days on average to pay off its…

A: Part-1Number of days of outstanding Inventory64Number of days for outstanding sales32Number of days…

Q: What would a cash flow forecast for Viggio for the next six months look like? Please create a…

A: Cash flow statement:Cash flow statement can be defined as the financial statement prepared by the…

Q: Here is a forecast of sales by National Bromide for the first four months of 2022 (figures in $…

A: The cash inflow calculation include calculating credit sales and cash sale . The total sales is…

Q: Skylark Industries has P6,000,000 in inventory and P3,000,000 in accounts receivable. The company…

A: GIVEN INVENTORY=P6000,000ACCOUNTS RECEIVABLES=P3000,000SALES=P100,000DPO=30 DAYS

Q: For the month of October, a company predicts total cash collections to be P1 million. Also for…

A: Budget: A budget is an estimation to determine the income that will be earned and expenses that will…

Q: Rooney Ltd has recorded the following sales for the first three months of 2011: January £30,000…

A: In this question, we need to compute the amount expected to be received in March 2011. This is…

Q: PLC esti

A: OPTIMAL CASH BALANCE=Square Root(2cT/k) c=Cost per transaction=$750 T=Total Cash needed during the…

Q: Biondi Manufacturing Company has an average accounts receivable balance of $1,250,000, an average…

A: Cash conversion cycle shows how a firm efficiently convert its investment in inventory into sales…

Q: ted sales to be P260,000 in June, P 270,000 in July and P300,000 in August. Hawaii collects 30% of a…

A: The accounts receivable balance can be computed as follows : . Since the 100% of the sales made is…

Q: The Bandon Pine Corporation's purchases from suppliers in a quarter are equal to 70 percent of the…

A: A cash budget serves as a financial planning instrument that offers an approximation of a company's…

Q: company analysis and value based on accounting data

A: The Answer

Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

A firm has projected sales in October, November, and December of P10,000, P20,000, and P30,000, respectively. The firm makes 20% of sales for cash and collects the balance one month following the sale. What is the firm’s total cash receipts in December?
1. P18,000 P20,000
2. P22,000 P24,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

A company estimates the following sales demand from Jan- July 2021: Sales (Units) 150,000 180,000 120,000 240,000 210,000 180,000 240,000 Month Jan Feb March April Мay June July Cash sales account for 50% of the total sales. Debtors are granted 2 months credit, of which half is collected in the month following sales, and the other half after 2 months. Determine the collection from sales in each of the months from April – June 2021. Explain how the credit policy offered by a company affects the budgeting exercise. (All workings must be clearly shown)
Halifax Shoes has 39% of its sales in cash and the remainder on credit. Of the credit sales, 65% is collected in the month of sale, 25% is collected the month after the sale, and 5% is collected the second month after the sale. How much cash will be collected in August if sales are estimated as $61,125 in June, $88,627 in July, and $70,376 in August? Round to the nearest penny, two decimal places.
If ABC plans to pay 30% of the month’s purchases during the month of purchase, 50% in the next month, and the balance two months from the month of purchase, how much would the total payments to suppliers be for the month of April? The forecasted purchases of ABC Corporation are as follows: January 500,000 February 600,000 March 650,000 April 750,000 May 825,000 June 900,000
Chatsworth Company Month Expected Sales July $40,000 August $50.000 September $30,000
BMC Co. has an average A/R balance of P1,250,000, average inventory balance of P1,750,000, and average accounts payable balance of P800,000. Its annual sales are P12,000,000 and its cost of goods sold represents 80% of annual sales. Assume there are 365 days in a year. What is BMC Co.’s cash conversion cycle? A. 53.23 days B. 60.83 days C. 72.28 days D. 84.15 days E. 100.55 days
Here is a forecast of sales by National Bromide for the first four months of 2019 (figures in $ thousands): Month 1 Month 2 Month 3 Month 4 Cash sales 17 26 20 16 Sales on credit 120 140 110 90 On the average 52% of credit sales are paid for in the current month, 32% are paid in the next month, and the remainder are paid in the month after that. What is the expected cash inflow from operations in months 3 and 4? (Do not round intermediate calculations. Enter your answers in thousands rounded to the nearest whole number.)
Suppose that Ken-Z Art Gallery has annual sales of $870,000, cost of goods sold of $560,000, average inventories of $244,500, average accounts receivable of $265,000, and an average accounts payable balance of $79,000. Assuming that all of Ken-Z's sales are on credit, what will be the firm's cash cycle? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Here is a forecast of sales by National Bromide for the first 4 months of 2019 (figures in thousands of dollars): Month: 1 2 3 4 Cash sales 22 31 25 21 Sales on credit 135 155 125 105 On average, 60% of credit sales are paid for in the current month, 20% in the next month, and the remainder in the month after that. What are the expected cash collections in months 3 and 4? (Enter your answers in whole dollars not in thousands of dollars.)
Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters as follows: Q1 Q2 Q3 Q4 Sales $ 105 $ 125 $ 145 $ 175 Sales for the first quarter of the following year are projected at $120 million. Accounts receivable at the beginning of the year were $47 million. Wildcat has a 45-day collection period. Wildcat’s purchases from suppliers in a quarter are equal to 45 percent of the next quarter’s forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and other expenses run about 20 percent of sales. Interest and dividends are $11 million per quarter. Wildcat plans a major capital outlay in the second quarter of $60 million. Finally, the company started the year with a cash balance of $66 million and wishes to maintain a $30 million minimum balance. a. Complete the following cash budget for Wildcat, Incorporated. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers…
The Bandon Pine Corporation's purchases from suppliers in a quarter are equal to 60 percent of the next quarter's forecast sales. The payables period is 60 days. Wages, taxes, and other expenses are 25 percent of sales and interest and dividends are $95 per quarter. No capital expenditures are planned. Here are the projected quarterly sales: Q1 az 03 Q4 Sales $1,860 $2,160 $1,860 $1,560 Sales for the first quarter of the following year are projected at $2,190. Calculate the company's cash outleys by completing the following: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Payment of accounts Wages, taxes, other expenses Long-term financing expenses (interest and dividends) Q1 Q2 Q3 Q4
A firm has $5 million of inventory and $2 million of accounts receivable. Its average daily sales are $100,000 and cost of goods sold (COGS) is $80,000. The company’s payables deferral period (accounts payable divided by daily purchases) is 32 days. What is its cash conversion cycle? a. 25.5 b. 26.0 c. 43.6 d. 50.5
Mercurius forecasts the following sales figures for the next four months. June July August September 420,000 350,000 380,000 440,000 Cash sales average 15% of total sales. Credit sales are collected 60% in the month of sale and 40% in the month following sale. What is Mercurius' estimated accounts receivable balance on 30 September?(Answer without comma separators, e.g., 1000 instead of 1,000)