Discus Productions needs to know its anticipated ensh inflows for the next quarter by month Cash sales are 10% of total sales each month. Historically, sales on sccount havebeen collected as follows 60% in the month of ale, 30% in the month after the sale, and the reurining 10% two months after the sale. Sales for the quarter are projected asfollows: April, S120,000: May, S100,000; and June, 590,000. Accounte receivable on March 31 were S60,000,The expected caalh collections of Discn Productions for June areOa $92,000.Oh S89.000.Oe $91.200.Od 595.400.

The cash collection schedule is prepared to estimate the cadh collection during the period.

Equarter by month. Cash sales are 10% of total sales each month. Historically, sales on ccount lave been collected as follows 60% in the month of sale, 30% in the month after the sale, and the reugjning 10% two months after the sale. Sales for the quarter are prmjected a follows: April, $120,000: May, S100,000; and June, 590,000. Accounts receivable on March 31 were S60,000. The expected enah collections of Discun Productions for June are Oa $92,000. O S89,000. Oe $91.200. O4 $95.400

Equarter by month. Cash sales are 10% of total sales each month. Historically, sales on ccount lave been collected as follows 60% in the month of sale, 30% in the month after the sale, and the reugjning 10% two months after the sale. Sales for the quarter are prmjected a follows: April, $120,000: May, S100,000; and June, 590,000. Accounts receivable on March 31 were S60,000. The expected enah collections of Discun Productions for June are Oa $92,000. O S89,000. Oe $91.200. O4 $95.400

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 14EA: Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is...

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Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is collected in the month of sale, 25% is collected the month after the sale, and 5% is collected the second month after the sale. How much cash will be collected in August if sales are estimated as $75,000 in June, $65,000 in July, and $90,000 in August?
Ranger Industries has provided the following information at June 30: Other information: Average selling price, 196 Average purchase price per unit, 110 Desired ending inventory, 40% of next months unit sales Collections from customers: In month of sale20% In month after sale50% Two months after sale30% Projected cash payments: Inventory purchases are paid for in the month following acquisition. Variable cash expenses, other than inventory, are equal to 25% of each months sales and are paid in the month of sale. Fixed cash expenses are 40,000 per month and are paid in the month incurred. Depreciation on equipment is 2,000 per month. REQUIREMENT You have been asked to prepare a master budget for the upcoming quarter (July, August, and September). The components of this budget are a monthly sales budget, a monthly purchases budget, a monthly cash budget, a forecasted income statement for the quarter, and a forecasted September 30 balance sheet. The worksheet MASTER has been provided to assist you. Ranger Industries desires to maintain a minimum cash balance of 8,000 at the end of each month. If this goal cannot be met, the company borrows the exact amount needed to reach its goal. If the company has a cash balance greater than 8,000 and also has loans payable outstanding, the amount in excess of 8,000 is paid to the bank. Annual interest of 18% is paid on a monthly basis on the outstanding balance.
Your projected sales for the first 3 months of next year are as follows:January, $15,000; February, $20,000; and March, $25,000. Based on lastyear’s data, cash sales are 20 percent of total sales for each month. Of theaccounts receivable, 60 percent are collected in the month after the sale and40 percent are collected in the second month following the sale. Sales forNovember of the current year are $15,000 and for December are $17,000.You have the following estimated payments: January, $4,500; February,$5,500; and March, $5,200.a. Using the format from the pro forma cash budget in Table 6–8, what is yourmonthly cash budget for January, February, and March?b. What will your accounts receivable be for the beginning of April?c. Will your company have any borrowing requirements for any month duringthis 3-month period?
Gilmore Company needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 25 percent of total sales each month. Historically, sales on account have been collected as follows: 50 percent in the month of the sale, 30 percent in the month after the sale, and the remaining 20 percent two months after the sale.Gross sales for the quarter are projected as follows: January $20,000 February $10,000 March $40,000 Accounts receivable on December 31 were $30,000.Gilmore's expected cash collections for March would be
Assume that sales and expenses forecasts for months April, May, June, and July are as follows. month, 60% are paid in the next month, and 20% are paid in the second month after. All expenses in a month are paid in the same month. There is a $20,000,000 minimum required cash balance at the end of each month, and any shortage from this minimum requirement will be covered by obtaining a loan. Any excess over $20,000,000 will be used to reduce or pay off cumulative loan. Initial cash balance in June is $6,000,000 and there is no cumulative loan at this time. Monthly prorated tax rate is 2%, and monthly interest rate on cumulative loan is 1%. Requirements: Prepare cash budget proforma for months June and July and interpret the result in detail.
Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or…
Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or sell any plant and…
Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or sell any plant and…
Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or…
Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or…
Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or…
Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or sell any plant and…