Activity 4: Cash Budget All the purchases of Finnigan Company are made on account. Seventy percent of th purchases are paid on the month of purchase and the remaining 30% are paid the folloo month. Finnigan Co. avails itself of the 5% discount in full provided by the suppliers in all purchases. Sixty percent of the sales of Finnigan Co. are made on account. Eighty percent of the sales on account are made on the month of sale when the customers are granted 2% dissrunt. Eighteen percent of the credit sales are collected the following month, but customers pay beyond the discount period of 10 days from the date of sale. The remaining 2% is consied uncollectible. The following additional data are provided as follows: Operating Expences P 40,000 55,000 60,000 80,000 Sales Purchases Period December 2019 (actual) January 2020 (estimated) February 2020 (estimated) |March 2020 (estimated) P 150,000 P 200,000 250,000 330,000 400,000 190,000 230,000 350,000 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.

Activity 4: Cash Budget All the purchases of Finnigan Company are made on account. Seventy percent of th purchases are paid on the month of purchase and the remaining 30% are paid the folloo month. Finnigan Co. avails itself of the 5% discount in full provided by the suppliers in all purchases. Sixty percent of the sales of Finnigan Co. are made on account. Eighty percent of the sales on account are made on the month of sale when the customers are granted 2% dissrunt. Eighteen percent of the credit sales are collected the following month, but customers pay beyond the discount period of 10 days from the date of sale. The remaining 2% is consied uncollectible. The following additional data are provided as follows: Operating Expences P 40,000 55,000 60,000 80,000 Sales Purchases Period December 2019 (actual) January 2020 (estimated) February 2020 (estimated) |March 2020 (estimated) P 150,000 P 200,000 250,000 330,000 400,000 190,000 230,000 350,000 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.

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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