a. Calculate the budgeted cash disbursements during the month of February. b. Calculate the budgeted cash collection during the month of January c. Calculated budgeted number of units of inventory to be purchased during the month of March Metlock State sells electronic products. The controller is responsible for preparing the master budget and has accumulated the information below for the months of January, February, and March. Balances at January 1 are expected to be as follows: Cash $5,720 Inventories Accounts receivable 432,700 Accounts payable The budget is to be based on the following assumptions: 1 Each month's sales are billed on the last day of the month. Customers are allowed a 3% discount if their payment is made within 10 days after the billing date. Receivables are booked at gross. The company collects 60% of the billings within the discount period, 25% by the end of the month after the date of sale, and 9% by the end of the second month after the date of sale; 6% prove uncollectible. It pays 54% of all materials purchases and the selling, general, and administrative expenses in the month purchased and the remainder in the following month. Each month's units of ending inventory are equal to 130% of the next month's units of sales. The cost of each unit of inventory is $20. 5. 6. Selling, general, and administrative expenses, of which $2,100 is for depreciation, are equal to 15% of the current month's sales. 7. Actual and projected sales are as follows: 2 3. 4. Month Sales November $369,000 12,300 December 378,000 12,600 January 372,000 12,400 February 357,000 11,900 375,000 12,500 March April 381,000 Units $321,800 138,400 12,700
a. Calculate the budgeted cash disbursements during the month of February. b. Calculate the budgeted cash collection during the month of January c. Calculated budgeted number of units of inventory to be purchased during the month of March Metlock State sells electronic products. The controller is responsible for preparing the master budget and has accumulated the information below for the months of January, February, and March. Balances at January 1 are expected to be as follows: Cash $5,720 Inventories Accounts receivable 432,700 Accounts payable The budget is to be based on the following assumptions: 1 Each month's sales are billed on the last day of the month. Customers are allowed a 3% discount if their payment is made within 10 days after the billing date. Receivables are booked at gross. The company collects 60% of the billings within the discount period, 25% by the end of the month after the date of sale, and 9% by the end of the second month after the date of sale; 6% prove uncollectible. It pays 54% of all materials purchases and the selling, general, and administrative expenses in the month purchased and the remainder in the following month. Each month's units of ending inventory are equal to 130% of the next month's units of sales. The cost of each unit of inventory is $20. 5. 6. Selling, general, and administrative expenses, of which $2,100 is for depreciation, are equal to 15% of the current month's sales. 7. Actual and projected sales are as follows: 2 3. 4. Month Sales November $369,000 12,300 December 378,000 12,600 January 372,000 12,400 February 357,000 11,900 375,000 12,500 March April 381,000 Units $321,800 138,400 12,700
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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Transcribed Image Text:a. Calculate the budgeted cash disbursements during the month of February.
b. Calculate the budgeted cash collection during the month of January
c. Calculated budgeted number of units of inventory to be purchased during the month of March
Metlock State sells electronic products. The controller is responsible for preparing the master budget and has accumulated the information below for the months of January, February, and March.
Balances at January 1 are expected to be as follows:
Cash
$5,720
Inventories
432,700
Accounts receivable
The budget is to be based on the following assumptions:
1.
2.
3.
4.
5.
6.
7.
Each month's sales are billed on the last day of the month.
Month
Customers are allowed a 3% discount if their payment is made within 10 days after the billing date. Receivables are booked at gross.
The company collects 60% of the billings within the discount period, 25% by the end of the month after the date of sale, and 9% by the end of the second month after the date of sale; 6% prove uncollectible,
It pays 54% of all materials purchases and the selling, general, and administrative expenses in the month purchased and the remainder in the following month. Each month's units of ending inventory are equal to 130% of the next month's units of sales.
The cost of each unit of inventory is $20.
Selling, general, and administrative expenses, of which $2,100 is for depreciation, are equal to 15% of the current month's sales.
Actual and projected sales are as follows:
Sales
April
November $369,000 12,300
December 378,000
12,600
January
372,000
February
357,000
March
375,000
Units
381,000
Accounts payable
12,400
11,900
12,500
$321,800
138,400
12,700
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