In the coming year, Concord, Inc. will be introducing its first product, a wrist brace that protects serious video gamers from repetitive-motion injuries. The brace will be sold for $13.00 to retailers throughout the country. All sales will be made on account. An expected65% of sales will be collected within the quarter of the sale, and another 30% in the quarter following the sale. The remaining 5% ofcredit sales are expected to be uncollectible. The sales budget for the coming year is as follows:1st Quarter2nd Quarter3rd Quarter4th QuarterBudgeted sales units29,00041,00057,00077,000Prepare Concord, Inc's cash receipts budget for the coming year. (Enter answers in necessary fields only. Leave other fields blank. Do notenter 0. Round "Budgeted sale price" and "Cash Receipts Budgets" answers to 2 decimal places, eg. 52.75 and all other answers to 0 decimalplaces, e.g. 5,275.)

Solution:- Preparation of cash receipts budget as follows under:-

Answered: In the coming year, Concord, Inc. will…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

May I ask for the answer of numbers 8 to 10. Thank you!
S Global Services is considering a promotional campaign that will increase annual credit sales by $450,000. The company will require investments in accounts receivable, inventory, and plant and equipment. The turnover for each is as follows: Accounts receivable Inventory Plant and equipment 2 6 1 All $450,000 of the sales will be collectible. However, collection costs will be 6 percent of sales, and production and selling costs will be 71 percent of sales. The cost to carry inventory will be 4 percent of inventory. Depreciation expense on plant and equipment will be 5 percent of plant and equipment. The tax rate is 30 percent. Accounts receivable Inventory a. Compute the investments in accounts receivable, inventory, and plant and equipment based on the turnover ratios. Add the three together. Plant and equipment Total Investment times times time b. Compute the accounts receivable collection costs and production and selling costs and add the two figures together. Collection cost…
Assume you are thinking about starting a business and would like to forecast your cash needs for the next six months. You expect sales to be approximately $30,000 per month for the first 12 months and your purchases to support sales will be approximately 60% of sales. You anticipate about 20% of your sales will be cash and 80% collected the following month. Your supplier has agreed to extend credit for 70 days at no cost (i.e. you will pay your bills on a two month lag). Your monthly expenses for rent, wages, utilities, and so forth will be approximately $3,500 per month. You have deposited $15,000 in a checking account to begin your operations and would like to maintain a minimum balance of $5,000 in that account. 1. Explain the purpose of creating budgets and how your budget will help the business remain capitalized 2 . Will you need additional funds at some point? Justify your answer. 3. How would you raise capital in the future?
Hawaii Inc. has projected sales to be P260,000 in June, P 270,000 in July and P300,000 in August. Hawaii collects 30% of a month’s sales in the month of sale, 50% in the month following the sale and 20% in the second month following the sale. What is the accounts receivable balance on August 31?
Rahul
Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $4.4 million on TV, radio, and print advertising this year for the campaign. The ads are expected to boost sales of the Mini Mochi Munch by $9.8 million this year and $7.8 million next year. In addition, the company expects that new consumers who try the Mini Mochi Munch will be more likely to try Kokomochi's other products. As a result, sales of other products are expected to rise by $2.1 million each year. Kokomochi's gross profit margin for the Mini Mochi Munch is 33%, and its gross profit margin averages 23% for all other products. The company's marginal corporate tax rate is 35% both this year and next year. What are the incremental earnings associated with the advertising campaign? Complete the table below: (Round to the nearest dollar.) Incremental Earnings Forecast Year 1 Year 2 Sales of Mini Mochi Munch Other Sales Cost of Goods Sold…
To increase sales, DD Company inaugurated a promotional campaign on June 30, 2020. DD placed a couponfor a premium in each box of cake sold at P400. A coffee mug costing P60 is offered as premium to customers who sendin 5 coupons and a remittance of P20. The distribution cost per premium is P10. DD Company estimated that only80% of the coupons issued will be redeemed. For the six months ended December 31, 2020, the following data isavailable in terms of units:Boxes of cake sold 20,000Premiums purchased 3,000Coupons redeemed 10,000What is the estimated liability for premiums on December 31, 2020?a. P180,000 b. P150,000 c. P160,000 d. P60,000
Jim Daniels Health Products has eight stores. The firm wants to expand by two more stores and needs a bank loan to do this. Mr. Hewitt, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. Following are actual and forecasted sales figures: Actual November December Sales Credit sales Cash sales $280,000 January 300,000 February March Of the firm's sales, 30 percent are for cash and the remaining 70 percent are on credit. Of credit sales, 20 percent are paid in the month after sale and 80 percent are paid in the second month after the sale. Materials cost 40 percent of sales and are purchased and received each month in an amount sufficient to cover the current month's expected sales. Materials are paid for in the month they are received. Labour expense is 30 percent of sales and is paid in the month of sales. Selling and administrative expense is 7 percent of sales and is also paid in the month of sales.…
ABC sells on credit terms of 2/10, n/30. Daily sales average 200 units at P2,500 each throughout the 365-day year. All sales are on credit. On average, 40% take the cash discount by paying on tenth day while the remaining 60% pay on the 30 th day. It is planning to change the credit terms to 2/10, n/25. If this change was done, daily sales will be 180 units. Around 45% will pay on the tenth day while the remaining 55% will pay on the 25 th day. 4. What will be the new average accounts receivable balance based on the given?5. What will be the new average collection period of the receivables in days?6. What will be the new receivable turnover? Round off to two decimal places.Please answer all three. Thank you.
Warren Motor Company sells $30 million of its products to wholesalers on terms of "net 30." Currently, the firm's average collection period is 48 days. In an effort to speed up the collection of receivables, Warren is considering offering a cash discount of 2 percent if customers pay their bills within 10 days. The firm expects 50 percent of it's customers to take the discount and it's average collection period to decline to 30 days. The firm's required pretax return (i.e. opportunity cost) on receivables investment is 16 percent. Determine the cost of the cash discounts to Warren. a. $300,000 b. $ 60,000 c. $ 40,000 d. $48,000
Global Services is considering a promotional campaign that will increase annual credit sales by $650,000. The company will require investments in accounts receivable, inventory, and plant and equipment. The turnover for each is as follows: Accounts receivable Inventory Plant and equipment 2 times 4 times 2 times All $650,000 of the sales will be collectible. However, collection costs will be 6 percent of sales, and production and selling costs will be 76 percent of sales. The cost to carry inventory will be 4 percent of inventory. Depreciation expense on plant and equipment will be 10 percent of plant and equipment. The tax rate is 35 percent. a. Compute the investments in accounts receivable, inventory, and plant and equipment based on the turnover ratios. Add the three together. Accounts receivable Inventory Plant and equipment Total Investment
Ace Corp. has sales for the second quarter of $2M, $3M, and $5m per month. All sales are on credit terms 2/10 net 40. Only a small proportion of customers (10%) pay early enough to earn the 2% discount. Most customers (70%) pay in the month following purchase, with the remaining 20% paying in the second month following purchase. It obtains 30 days credit from its suppliers, and purchases usually amount to 70 % of the current month's sales. Taxes ($0.75M) must be paid in the third month of the quarter. Other expenses are (i) wages @ 15% of the current month's sales (ii) interest on the debt ($0.5M), and “other expenses” @ 10% of the current month's sales. Construct a cash budget for the third month of the second quarter. Does the firm have a cash surplus or deficit?

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS