Activity 4: Cash Budget All the purchases of Finnigan Company are made on account. Seventy percent o purchases are paid on the month of purchase and the remaining 30% are paid the follo month. Finnigan Co. avails itself of the 5% discount in full provided by the suppliers in purchases. Sixty percent of the sales of Finnigan Co. are made on account. Eighty percent o sales on account are made on the month of sale when the customers are granted 2% d Eighteen percent of the credit sales are collected the following month, but customers p beyond the discount period of 10 days from the date of sale. The remaining 2% is cons uncollectible. The following additional data are provided as follows:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Activity 4 1
Activity 4: Cash Budget
All the purchases of Finnigan Company are made on account. Seventy percent of
purchases are paid on the month of purchase and the remaining 30% are paid the follov
month. Finnigan Co. avails itself of the 5% discount in full provided by the suppliers in a
purchases.
Sixty percent of the sales of Finnigan Co. are made on account. Eighty percent of
sales on account are made on the month of sale when the customers are granted 2% dis
Eighteen percent of the credit sales are collected the following month, but customers pa
beyond the cdiscount period of 10 days from the date of sale. The remaining 2 % is consie
uncollectible.
The following additional data are provided as follows:
Operating Exper
P 40,000
Period
Sales
Purchases
December 2019 (actual)
January 2020 (estimated)
February 2020 (estimated)
March 2020 (estimated)
P 200,000
250,000
330,000
400,000
P 150,000
190,000
230,000
55,000
60,000
350,000
80,000
The cash balance of the business on January 1, 2020 is P100,000. The business plans to buy
additional equipment in February 2020 amounting to P110,000 and will make a 35% down
payment on the month of purchase. The balance will be paid the following month.
Transcribed Image Text:Activity 4 1 Activity 4: Cash Budget All the purchases of Finnigan Company are made on account. Seventy percent of purchases are paid on the month of purchase and the remaining 30% are paid the follov month. Finnigan Co. avails itself of the 5% discount in full provided by the suppliers in a purchases. Sixty percent of the sales of Finnigan Co. are made on account. Eighty percent of sales on account are made on the month of sale when the customers are granted 2% dis Eighteen percent of the credit sales are collected the following month, but customers pa beyond the cdiscount period of 10 days from the date of sale. The remaining 2 % is consie uncollectible. The following additional data are provided as follows: Operating Exper P 40,000 Period Sales Purchases December 2019 (actual) January 2020 (estimated) February 2020 (estimated) March 2020 (estimated) P 200,000 250,000 330,000 400,000 P 150,000 190,000 230,000 55,000 60,000 350,000 80,000 The cash balance of the business on January 1, 2020 is P100,000. The business plans to buy additional equipment in February 2020 amounting to P110,000 and will make a 35% down payment on the month of purchase. The balance will be paid the following month.
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