Gammaro Corporation has found that 70% of its sales in any given month are credit sales,while the remainder are cash sales. Of the credit sales, Gammaro Corporation hasexperienced the following collection pattern:25% received in the month of the sale50% received in the month after the sale20% received two months after the sale5% of the credit sales are never receivedNovember sales for last year were $110,000, while December sales were $130,000.Projected sales for the next three months are as follows:January salesFebruary salesMarch salesRequirement$ 150,000$ 135,000$ 185,000Prepare a cash collections budget for the first quarter, with a column for each monthand for the quarter. (Round your answers to the nearest whole dollar.)Cash salesCollections on credit sales:25% Month of sale50% Month after20% Two months afterTotal cash collectionsGammaro CorporationCash Collections BudgetFor the Months of January through MarchJanuary$45,00026,250

Step 1: Computation of cash sales: Step 2:Computation of credit sales: Step 3:Computation of the…

Answered: Gammaro Corporation has found that 70%…

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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Gilmore Electronics had the following data for a recent year: Cash sales $135,000 Credit sales 512,000 Accounts receivable determined to be uncollectible 9,650 The firm's estimated rate for bad debts is 1.15% of credit sales. Conceptual Connection: If Gilmore's estimate of bad debts is correct (1.15% of credit sales) and the gross margin is 20%, by how much did Gilmore's income from operations increase assuming $150,000 of the sales would have been lost if credit sales were not offered?
Atlantic Northern Inc. currently has $715,000 in accounts receivable and generated $4,650,000 in sales (all on credit) during the year that just ended. The firm’s days sales outstanding (DSO) is days. Use 365 days as the length of a year in all calculations. Atlantic Northern Inc.’s CFO is unhappy with its DSO and wants to improve collections next year. Sales are expected to grow by 13% next year, and the CFO wants to lower the DSO to the industry average of 30 days. How much accounts receivable is the firm expected to carry? $453,471 $431,877 $410,283 $388,689
omework (required) Anderson Corporation has found that 80% of its sales in any given month are credit sales, while the remainder are cash sales. Of the credit sales, Anderson Corporation has experienced the following collection pattern: 25% received in the month of the sale 50% received in the month after the sale 18% received two months after the sale 7% of the credit sales are never received Cash sales Collections on credit sales: 25% Month of sale 50% Month after 18% Two months after Total cash collections Anderson Corporation Cash Collections Budget For the Months of January through March January February $ $ 33,000 Part 2 of 4 33,000 50,000 12,960 128,960 Points: 0.2 of 2 January sales.. February sales March sales. November sales for last year were $90,000, while December sales were $125,000. Projected sales for the next three months are as follows: Save $ 165,000 $ 130,000 $ 200,000 Requirement Prepare a cash collections budget for the first quarter, with a column for each month…
Wilcox Mills is a manufacturer that makes all sales on 30-day credit terms. Annual sales are approximately $30 million. At the end of year 1, accounts receivable were presented in the company's balance sheet as follows. Accounts receivable from clients Less: Allowance for doubtful accounts $3,100,000 80,000 During year 2, $190,000 of specific accounts receivable were written off as uncollectible. Of these accounts written off, receivables totaling $14,000 were subsequently collected. At the end of year 2, an aging of accounts receivable indicated a need for a $256,000 allowance to cover possible failure to collect the accounts currently outstanding. Wilcox Mills makes adjusting entries for uncollectible accounts only at year-end. Required: a. Prepare the following general journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. One entry to summarize all accounts written off against the Allowance for Doubtful…
69) Western Company expects the following credit sales for the first five months of the year: January, $43,000; February, $58,000; March, $48,000; April, $54,000, May $58,000. Experience has shown that payment for the credit sales is received as follows: 60% in the month of sale, 25% in the first month after sale, 10% in the second month after sale, and the remainder is uncollectible. How much cash can Western Company expect to collect in March as a result of credit sales (current and past)? A) $28,800. B) $42,600. C) $48,000. D) $47,600. E) $41,100.
Page Company makes 30% of its sales for cash and 70% on account. 60% of the credit sales are collected in the month of sale, 25% in the month following sale, and 12% in the second month following sale. The remainder is uncollectible. The following information has been gathered for the current year: Month Total sales Total cash receipts in Month 4 will be: Multiple Choice $27,230. $47,900. 1 2 3 $ 60,000 $ 70,000 $50,000 $30,000 £36 230
You are trying to prepare financial statements for Bartlett Pickle Company, but seem to be missing its balance sheet. You have Bartlett's income statement, which shows sales last year were $300 million with a gross profit margin of 30 percent. You also know that credit sales equaled three-quarters of Bartlett's total revenues last year. In adlon, Bartlett had a collection period of 40 days, a payables period of 30 days, and an inventory turnover of 7 times based on cost of oods sold. Calculate Bartlett's year-ending balance for accounts receivable, inventory, and accounts payable. Note: Round your answers to 1 decimal place. Bartlett's year-ending balance (million) Accounts receivable Inventory Accounts payable BV3
Piedmont Industries sells on terms of 2/10 net 30. Total sales for the year are $1.5 million. Thirty percent of customers pay on the 10th day and take discounts; the other 70% pay, on average, 60 days after their purchases. What would happen to average receivables if Piedmont toughened its collection policy with the result that all non-discount customers paid on the 40th day?

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