Galaxy Lighting Company manufactures and sells lighting fixtures. Estimated sales for the next three months are: September P 350,000 October 500,000 November 400,000 Sales for August were $400,000. All sales are on account. Galaxy Lighting Company estimates that 60% of the accounts receivable are collected in the month of sale with the remaining 40% collected the following month. The units sell for $30 each. The cash balance for September 1 is $100,000. Generally, 60% of purchases are due and payable in the month of purchase with the remainder due the following month. Purchase cost per unit for materials is $18. The company maintains an end-of-the-month inventory of 1,000 units plus 10% of next month’s unit sales. In addition to the information given, selling and administrative expenses paid in cash are $120,000 per month. Requirement: Prepare a monthly cash budget for September and October for Galaxy Lighting Company.
- Galaxy Lighting Company manufactures and sells lighting fixtures. Estimated sales for
the next three months are:
September P 350,000
October 500,000
November 400,000
Sales for August were $400,000. All sales are on account. Galaxy Lighting Company
estimates that 60% of the accounts receivable are collected in the month of sale with
the remaining 40% collected the following month. The units sell for $30 each. The
cash balance for September 1 is $100,000.
Generally, 60% of purchases are due and payable in the month of purchase with the
remainder due the following month. Purchase cost per unit for materials is $18. The
company maintains an end-of-the-month inventory of 1,000 units plus 10% of next
month’s unit sales.
In addition to the information given, selling and administrative expenses paid in cash
are $120,000 per month.
Requirement: Prepare a monthly
Lighting Company.
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