**Budget Information for May**Assume a merchandising company provides the following information from its master budget for the month of May:- **Sales:** $125,000- **Cost of Goods Sold:** $90,000- **Selling and Administrative Expenses:** $24,000- **Accounts Receivable, May 1st:** $16,000- **Accounts Receivable, May 31st:** $35,000**Question:** If all of the company's sales are on account, what is the amount of cash collections from customers included in the cash budget for May?**Multiple Choice Options:**- $109,000- $106,000- $128,000- $125,000To solve this problem, calculate the cash collections by considering the changes in accounts receivable. Subtract the accounts receivable at the end of May from the sum of sales and add accounts receivable at the beginning of May.Let's break it down:1. **Calculate Changes in Receivables:** - Starting Receivables (May 1st): $16,000 - Ending Receivables (May 31st): $35,000 - Increase in Receivables: $35,000 - $16,000 = $19,0002. **Calculate Cash Collections:** - Total Sales: $125,000 - Cash Collections = Total Sales - Increase in Receivables - Cash Collections = $125,000 - $19,000 = $106,000Therefore, the correct answer is **$106,000**.

A cash budget is prepared to estimate the total cash received and total cash disbursement. The cash…

Assume a merchandising company provides the following information from its master budget for the month of May: Sales Cost of goods sold Selling and administrative expenses Accounts receivable, May 1st Accounts receivable, May 31st $ 125,000 $ 90,000 $ 24,000 $ 16,000 $ 35,000 If all of the company's sales are on account, what is the amount of cash collections from customers included in the cash budget for May?

Assume a merchandising company provides the following information from its master budget for the month of May: Sales Cost of goods sold Selling and administrative expenses Accounts receivable, May 1st Accounts receivable, May 31st $ 125,000 $ 90,000 $ 24,000 $ 16,000 $ 35,000 If all of the company's sales are on account, what is the amount of cash collections from customers included in the cash budget for May?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The following data are from the budget of Ritewell Publishers. Half the company's sales are transacted on a cash basis. The other half are paid for with a 1-month delay. The company pays all of its credit purchases with a 1-month delay. Credit purchases in January were $140, and total sales in January were $290. TT February March $ 420 April Total sales $ 440 $ 400 125 135 115 Cash purchases Credit purchases Labor and administrative purchases Taxes, interest, and dividends Capital expenditures 95 85 95 85 85 85 65 65 65 210 Complete the following cash budget. (Leave no cells blank. Enter '0' when necessary. Negative amounts should be indicated by a minus sign.) February March Aprit Sources of cash Collections on current sales Collections on amounts receivable Total sources of cash 0 $ Uses of cash Payments of accounts payable Cash purchases o search
What about preparing a schedule of expected cash disbursement for merchandise purchases, by month and the total and budgeted income statement for the three-month period ending June 30.
The controller of Ultramint Company wishes to improve the company's control system by preparing a monthly cash budget. The following information relates to the month ending July 31, 2008. June 30, 2008 cash balance ... Dividends to be declared on July 15* Cash expenditures to be paid in July for operating expenses Amortization expense.... Cash collections to be received ... $ 90,000 24,000 73,600 9,000 178,000 112,400 41,000 50,000 Merchandise purchases to be paid in cash Equipment to be purchased for cash. …….. Ulramint Company wishes to maintain a minimum cash balance of .... *Dividends are payable to shareholders of record on declaration date, 30 days after declaration. Required: Prepare a cash budget for the month ended July 31, 2008, indicating how much, if anything, Ultramint will need to borrow to meet its minimum cash requirement.
On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company's sales are made on account. The following information has been provided by Spicer's management. Month Credit Sales January $ 300,000 (actual) February 400,000 (actual) March 629,000 (estimated) April 571,000 (estimated) May 800,000 (estimated) The company's collection activity on credit sales historically has been as follows. Collections in the month of the sale 50 % Collections one month after the sale 30 Collections two months after the sale 15 Uncollectible accounts 5 Spicer's total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400, 000 per month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter. Compute Spicer's budgeted cash balance at the ends of March, April, and May.
The following information was taken from Bonita Industries's cash budget for the month of July: Beginning cash balance $440000 Cash receipts 404000 Cash disbursements 558000 If the company's policy is to maintain a minimum end of the month cash balance of $430000, the amount the company would have to borrow in July is $286000. $144000. $10000. $26000.
The management accountant at Miller Merchandising & More, Odail Russell is in the process of preparing the cash budget for the business for the fourth quarter of 2021. It is customary for the business to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows: Month Cash Sales Sales on Account Purchases August $ 85,000.00 $ 640,000.00 $ 420,000.00 September $ 70,000.00 $ 550,000.00 $ 550,000.00 October $ 88,550.00 $ 600,000.00 $ 500,000.00 November $ 77,160.00 $ 800,000.00 $ 600,000.00 December $ 174,870.00 $ 500,000.00 $ 450,000.00 i) An analysis of the records shows that trade receivables are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90:50% in the month of sale 30% in the first month following the sale20% in the second month following the saleii) Expected purchases include monthly cash purchases of…
Please don't give image format
please help and provide correct answer with proper working
Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February. Prepare a cash budget for January and February in columnar form. please dont provide answer in an image format thnku
X-Tel budgets sales of $55,000 for April, $110,000 for May, and $70,000 for June. Sales are 50% cash and 50% on credit. All credit sales are collected in the month following the sale. Total sales for March were $13,000. Prepare a schedule of cash receipts from sales for April, May, and June Sales Cash receipts from: Total cash receipts X-TEL Schedule of Cash Receipts from Sales April $ $ 55,000 $ 0 $ May 110,000 $ 0 $ June 70,000 0
The following information is available to assist you in preparing a company's cash budget. a. The cash balance on July 1 is $41,000. b. Actual sales for May and June and expected sales for July are as follows: May $ 68,400 $ 87,400 $ 95,800 $ 415,000 $ 614,000 $ 692,000 June July Cash sales Sales on account Sales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected In the second month following sale. The remaining 2% is uncollectible. C. Purchases of inventory will total $376,000 for July. Thirty percent of a month's Inventory purchases are paid during the month of purchase. The accounts payable remaining from June's inventory purchases total $174,500, all of which will be paid in July. d. Selling and administrative expenses are budgeted at $452,000 for July. Of this amount, $63,500 is for depreciation. e. A new web server for the Marketing Department costing $86,500 will be…
Tamarisk Garden Center has the following cash budget information available for the month of August: Beginning cash balance Cash receipts from sales and collections on account Collection of note receivable and interest Cash disbursements for operating expenses The company would have to $129,000 eTexthonk and Media 115,000 8,100 If the company has a policy of maintaining an end of the month cash balance of $120,000, determine the amount the company would have to borrow or the amount of excess cash it will have to invest in August. 96,400 SUPPORT