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Blue Spruce, Inc. has budgeted sales revenues as follows: Creditsales Cash sales Total sales June July August June July $145,000 $125,000 5 92.000 95.000 253,000 200,000 $240.000 $378,000 $ 292.000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted Inventory purchases are as follows: August $302.000 224,000 110,000 Other cash disbursements budgeted: (a) selling and administrative expenses of $54,000 each month, (b) dividends of $104,000 will be paid in July, and (d purchase of equipment in August for $33,000 cash The company's policy is to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance Borrowed money is repaid in months when there is an

Blue Spruce, Inc. has budgeted sales revenues as follows: Creditsales Cash sales Total sales June July August June July $145,000 $125,000 5 92.000 95.000 253,000 200,000 $240.000 $378,000 $ 292.000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted Inventory purchases are as follows: August $302.000 224,000 110,000 Other cash disbursements budgeted: (a) selling and administrative expenses of $54,000 each month, (b) dividends of $104,000 will be paid in July, and (d purchase of equipment in August for $33,000 cash The company's policy is to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance Borrowed money is repaid in months when there is an

FINANCIAL ACCOUNTING
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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Blue Spruce, Inc. has budgeted sales revenues as follows: Credit sales Cash sales Total sales June July August $145,000 $125,000 $ 92.000 95,000 253,000 200,000 $240.000 $378,000 $ 292.000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted inventory purchases are as follows June July August $302.000 224,000 110,000 Other cash disbursements budgeted: (a) selling and administrative expenses of $54,000 each month, (b) dividends of $104,000 will be paid in July, and (d) purchase of equipment in August for $33,000 cash The company's policy is to maintains a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money in this case is for one month
Transcribed Image Text:Blue Spruce, Inc. has budgeted sales revenues as follows: Credit sales Cash sales Total sales June July August $145,000 $125,000 $ 92.000 95,000 253,000 200,000 $240.000 $378,000 $ 292.000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted inventory purchases are as follows June July August $302.000 224,000 110,000 Other cash disbursements budgeted: (a) selling and administrative expenses of $54,000 each month, (b) dividends of $104,000 will be paid in July, and (d) purchase of equipment in August for $33,000 cash The company's policy is to maintains a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money in this case is for one month
CO care separate schedusertor expected conections from contomers and expected paymentstor purchases of vendor Do not leave any answer held blank, Enter O for amounts) Credit sales June July Augst Schedule of Expected Collections from Customers Total collections July Inventory purchner June July August Scheible of Expected Payments for Purchases of entory July August
Transcribed Image Text:CO care separate schedusertor expected conections from contomers and expected paymentstor purchases of vendor Do not leave any answer held blank, Enter O for amounts) Credit sales June July Augst Schedule of Expected Collections from Customers Total collections July Inventory purchner June July August Scheible of Expected Payments for Purchases of entory July August
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