a. Management expects to sell equipment that cost $14,000 at a gain of $7,000. Accumulated depreciation on this equipment is $5,000. b. Management expects to sell 7,100 cases of water in August and 9,000 cases in September. Each case sells for $14. Cash sales average 20% of total sales, and credit sales make up the rest. Three-fourths of credit sales are collected in the month of sale, with the balance collected the following month. c. The company pays rent and property taxes of $4,500 each month. Commissions and other selling expenses average 30% of sales. Agua Cool pays one-half of commissions and other selling expenses in the month incurred, with the balance paid the following month.
a. Management expects to sell equipment that cost $14,000 at a gain of $7,000. Accumulated depreciation on this equipment is $5,000. b. Management expects to sell 7,100 cases of water in August and 9,000 cases in September. Each case sells for $14. Cash sales average 20% of total sales, and credit sales make up the rest. Three-fourths of credit sales are collected in the month of sale, with the balance collected the following month. c. The company pays rent and property taxes of $4,500 each month. Commissions and other selling expenses average 30% of sales. Agua Cool pays one-half of commissions and other selling expenses in the month incurred, with the balance paid the following month.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 1PA: Your company is planning to purchase a new log splitter for is lawn and garden business. The new...
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Question
Finish a-c
![a. Management expects to sell equipment that cost $14,000 at a gain of $7,000.
Accumulated depreciation on this equipment is $5,000.
b. Management expects to sell 7,100 cases of water in August and 9,000 cases in
September. Each case sells for $14. Cash sales average 20% of total sales,
and credit sales make up the rest. Three-fourths of credit sales are collected in
the month of sale, with the balance collected the following month.
c. The company pays rent and property taxes of $4,500 each month.
Commissions and other selling expenses average 30% of sales. Agua Cool
pays one-half of commissions and other selling expenses in the month
incurred, with the balance paid the following month.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd4dcce95-7626-4ff4-839d-a41abe7229fc%2F00a9dbfb-125d-4f1c-b9d2-34fe7ae42d3c%2Fk6lcxj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:a. Management expects to sell equipment that cost $14,000 at a gain of $7,000.
Accumulated depreciation on this equipment is $5,000.
b. Management expects to sell 7,100 cases of water in August and 9,000 cases in
September. Each case sells for $14. Cash sales average 20% of total sales,
and credit sales make up the rest. Three-fourths of credit sales are collected in
the month of sale, with the balance collected the following month.
c. The company pays rent and property taxes of $4,500 each month.
Commissions and other selling expenses average 30% of sales. Agua Cool
pays one-half of commissions and other selling expenses in the month
incurred, with the balance paid the following month.
![Agua Cool is a distributor of bottled water. For each of the items, compute the amount of cash receipts or payments Agua Cool will budget for September. The solution to one item may depend on the answer to an earlier item. (Round your answers to the
nearest whole dollar)
(Click the icon to view the items.)
a. Management expects to sell equipment that cost $14,000 at a gain of $7,000. Accumulated depreciation on this equipment is $5,000.
The amount of cash receipts the company will budget for the sale of the equipment is](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd4dcce95-7626-4ff4-839d-a41abe7229fc%2F00a9dbfb-125d-4f1c-b9d2-34fe7ae42d3c%2Flknvjp4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Agua Cool is a distributor of bottled water. For each of the items, compute the amount of cash receipts or payments Agua Cool will budget for September. The solution to one item may depend on the answer to an earlier item. (Round your answers to the
nearest whole dollar)
(Click the icon to view the items.)
a. Management expects to sell equipment that cost $14,000 at a gain of $7,000. Accumulated depreciation on this equipment is $5,000.
The amount of cash receipts the company will budget for the sale of the equipment is
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