Example 8: Using the following information, draw a budget for three months starting from October 2016: 1) Opening cash balance in October 4,000. 2) Cash Sales October: 735,000; November 730,000; December; 25,000. 3) Credit purchases - September 20,000; October 14,000; November 715,000; December 14,000. 4) Suppliers allow one-month period of credit. 5) Dividend receivable in November is 5,000. 6) Advance tax payable in October is 4,000 payable. 7) Sale of an old asset during the month of October is 10,000.

Example 8: Using the following information, draw a budget for three months starting from October 2016: 1) Opening cash balance in October 4,000. 2) Cash Sales October: 735,000; November 730,000; December; 25,000. 3) Credit purchases - September 20,000; October 14,000; November 715,000; December 14,000. 4) Suppliers allow one-month period of credit. 5) Dividend receivable in November is 5,000. 6) Advance tax payable in October is 4,000 payable. 7) Sale of an old asset during the month of October is 10,000.

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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Cheyenne Company has budgeted the following information for June: Cash receipts Beginning cash balance Cash payments Desired ending cash balance If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 increments, and interest is paid monthly at 1% on the first day of the following month. The company had no debt before June 1. The amount of interest paid on July 1 would be: Multiple Choice $590. $ 339,000 22,000 382,000 42,000 $476.
Assume a company is preparing a budget for its first two months of operations. During the first and second months it expects credit sales of $40,000 and $77,000, respectively. The company expects to collect 30% of its credit sales in the month of the sale and the remaining 70% in the following month. What is the expected cash collections from credit sales during the first month?
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In September 2019, the budget committee of Jason Company assembles the following data: 1. 2 Expected Sales 4. October November December Cost of goods sold is expected to be 60% of sales. 3. Desired ending merchandise inventory is 20% of the next month's cost of goods sold. The beginning inventory at October 1 will be the desired amount. $1,800,000 1,700,000 V 1,600,000 Prepare the budgeted income statement for October through gross profit on sales, including a cost of goods sold schedule. V M JASON COMPANY Budgeted Income Statement For the Month Ended October 31, 2019 $ $
Dorel Company expects to have a cash balance of $5,000 on January 1, 2013. Relevant monthly budget data for the first two months of 2013 are as follows: 1. Collections from customers: January $60,000; February $75,000 2. Sales of marketable securities in January are expected to realize $10,000 in cash. 3. Purchase delivery truck in January and paid cash $12,000. 4. Payments to suppliers: January $15,000; February $25,000 5. Direct labour: January $25,000; February $20,000. Wages are paid in the month they are incurred. 6. Manufacturing overhead: January $8,000; February $7,000. These costs include depreciation of $3,000 per month. All other overhead costs are paid as incurred. 7. Selling and administrative expenses: January $10,000; February $12,000. These costs are excluşive of depreciation. They are paid as incurred. Dorel Company has a line of credit at a local bank. It can borrow up to $20,000 at 4% per annum, The company wants to keep a minimum monthly cash balance of $15,000
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Bantam Industries has budgeted the following information for March: Cash receipts Beginning cash balance Cash payments Desired ending cash balance If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 increments, and interest is paid monthly at 1% on the first day of the following month. The company had no debt before March 1. How much cash will the company need to borrow in March? Multiple Choice $13,000 $65,000 $ 343,000 23,000 388,000 43,000 $52,000 The company should not need to borrow any cash In March
Please answer with excel forumlas and step by step explanations. Kayak Company budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Receipts Cash payments January $ 569,000 $ 508,000 February 455,000 425,000 March 505,000 600,000 Kayak requires a minimum cash balance of $38,000 at each month-end. Loans taken to meet this requirement charge 0.7% interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $38,000 is used to repay loans at month-end. The company has a cash balance of $38,000 and a loan balance of $76,000 at January 1. Prepare monthly cash budgets for January, February, and March.
Kayak Company budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Receipts Cash payments January $ 526,000 $ 472,800 February 412,000 358,800 March 459,000 528,000 Kayak requires a minimum cash balance of $30,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $30,000 is used to repay loans at month-end. The company has a cash balance of $30,000 and a loan balance of $60,000 at January 1. Prepare monthly cash budgets for January, February, and March. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.