are available for the months April through June, during which the loan will be used: a. On April 1, the start of the loan period, the cash balance will be $26,800. Accounts receivable on April 1 will total $193,200, of which $165,600 will be collected during April and $22,080 will be collected during May. The remainder will be uncollectible. b. Past experience shows that 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% is bad debts that are never collected. Budgeted sales and expenses for the three- month period follow: Sales (all on account) Merchandise purchases Payroll Lease payments Advertising Equipment purchases Depreciation April $360,000 $ 275,000 $ 32,000 $ 38,400 $ 73,000 $0 $ 15,400 May $ 582,000 $ 227,000 Required 1 $ 32,000 $ 38,400 $ 73,000 Required 2 $0 $ 15,400 June $ 305,000 $ 143,500 $ 23,700 $ 38,400 $ 71,270 1 c. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid in April, total $166,000. d. In preparing the cash budget, assume that the $81,000 loan will be made in April and repaid in June. Interest on the loan will total $1,160. $ 85,000 $ 15,400 Required: 1. Calculate the expected cash collections for April, May, and June, and for the three months in total. 2. Prepare a cash budget, by month and in total, for the three-month period. Complete this question by entering your answers in the tabs below.
are available for the months April through June, during which the loan will be used: a. On April 1, the start of the loan period, the cash balance will be $26,800. Accounts receivable on April 1 will total $193,200, of which $165,600 will be collected during April and $22,080 will be collected during May. The remainder will be uncollectible. b. Past experience shows that 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% is bad debts that are never collected. Budgeted sales and expenses for the three- month period follow: Sales (all on account) Merchandise purchases Payroll Lease payments Advertising Equipment purchases Depreciation April $360,000 $ 275,000 $ 32,000 $ 38,400 $ 73,000 $0 $ 15,400 May $ 582,000 $ 227,000 Required 1 $ 32,000 $ 38,400 $ 73,000 Required 2 $0 $ 15,400 June $ 305,000 $ 143,500 $ 23,700 $ 38,400 $ 71,270 1 c. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid in April, total $166,000. d. In preparing the cash budget, assume that the $81,000 loan will be made in April and repaid in June. Interest on the loan will total $1,160. $ 85,000 $ 15,400 Required: 1. Calculate the expected cash collections for April, May, and June, and for the three months in total. 2. Prepare a cash budget, by month and in total, for the three-month period. Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:are available for the months April through June, during which the loan will be used:
a. On April 1, the start of the loan period, the cash balance will be $26,800. Accounts receivable on April 1 will total $193,200, of which
$165,600 will be collected during April and $22,080 will be collected during May. The remainder will be uncollectible.
b. Past experience shows that 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in
the second month following sale. The other 2% is bad debts that are never collected. Budgeted sales and expenses for the three-
month period follow:
Sales (all on account)
Merchandise purchases
Payroll
Lease payments
Advertising
Equipment purchases
Depreciation
April
$360,000
$ 275,000
$32,000
$ 38,400
$ 73,000
$0
$ 15,400
Required 1
Required 2
May
$ 582,000
$ 227,000
$ 32,000
$ 38,400
$ 73,000
$0
$ 15,400
c. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during
March, which will be paid in April, total $166,000.
d. In preparing the cash budget, assume that the $81,000 loan will be made in April and repaid in June. Interest on the loan will total
$1,160.
Required:
1. Calculate the expected cash collections for April, May, and June, and for the three months in total.
2. Prepare a cash budget, by month and in total, for the three-month period.
Total cash collections
June
$ 305,000
$ 143,500
Complete this question by entering your answers in the tabs below.
$ 23,700
$ 38,400
< Required 1
$ 71,270
$ 85,000
$ 15,400
Calculate the expected cash collections for April, May, and June, and for the three months in total.
Schedule of Expected Cash Collections
April
May
June
Quarter
Required 2 >
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare a cash budget, by month and in total, for the three-month period. (Cash deficiency, repayments and interest should be
indicated by a minus sign.)
Beginning cash balance
Add receipts:
Collections from customers
Total cash available
Less cash disbursements:
Merchandise purchases
Payroll
Lease payments
Advertising
Equipment purchases
Total cash disbursements
Excess (deficiency) of cash available over disbursements
Financing:
Borrowings
Repayments
Interest
Total financing
Ending cash balance
Prime Products
Cash Budget
April
< Required 1
0
0
0
0
0 $
May
Required 2
0
0
0
0
>
$
June
0
0
0
0
0 $
Quarter
0
0
0
0
0
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