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lated interest at the end of the quarter. Required: Using the data above: 1. Complete the following schedule: Schedule of Expected Cash Collections January February March Cash sales... Credit sales... Total collections....... $28,000 36,000 $64,000 Quarter

lated interest at the end of the quarter. Required: Using the data above: 1. Complete the following schedule: Schedule of Expected Cash Collections January February March Cash sales... Credit sales... Total collections....... $28,000 36,000 $64,000 Quarter

FINANCIAL ACCOUNTING
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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2. Complete the following: Budgeted cost of goods sold Add desired ending inventory. Total needs Less beginning inventory Required purchases *$70,000 sales x 70% = $49,000. ¹$80,000 x 70% X 20% = $11,200. December purchases January purchases. February purchases. March purchases Total disbursements *Beginning balance of the accounts payable. 4 & Schedule of Expected Cash Disbursements-Merchandise Purchases 3. Complete the following schedule: Commissions Merchandise Purchases Budget Rent Other expenses Total disbursements 4. Complete the following cash budget: Cash balance, beginning Add cash collections. Total cash available Less cash disbursements: Schedule of Expected Cash Disbursements-Selling For inventory.. For operating expenses For equipment.. Total cash disbursements Excess (deficiency) of cash. Financing Etc. 5. Prepare an January February March Quarter $49,000* 11,200¹ 60,200 9,800 $50,400 January February March Quarter , for the quarter ended March 31. $32,550* 12,600 $45,150 January $12,000 1,800 5,600 $19,400 Cash Budget Kw January $ 6,000 64,000 70,000 45,150 19,400 3,000 67,550 2,450 income statement, $37,800 $32,550, 50,400 and Administrative Expenses February March Quarter Febr February March Quarter
Transcribed Image Text:2. Complete the following: Budgeted cost of goods sold Add desired ending inventory. Total needs Less beginning inventory Required purchases *$70,000 sales x 70% = $49,000. ¹$80,000 x 70% X 20% = $11,200. December purchases January purchases. February purchases. March purchases Total disbursements *Beginning balance of the accounts payable. 4 & Schedule of Expected Cash Disbursements-Merchandise Purchases 3. Complete the following schedule: Commissions Merchandise Purchases Budget Rent Other expenses Total disbursements 4. Complete the following cash budget: Cash balance, beginning Add cash collections. Total cash available Less cash disbursements: Schedule of Expected Cash Disbursements-Selling For inventory.. For operating expenses For equipment.. Total cash disbursements Excess (deficiency) of cash. Financing Etc. 5. Prepare an January February March Quarter $49,000* 11,200¹ 60,200 9,800 $50,400 January February March Quarter , for the quarter ended March 31. $32,550* 12,600 $45,150 January $12,000 1,800 5,600 $19,400 Cash Budget Kw January $ 6,000 64,000 70,000 45,150 19,400 3,000 67,550 2,450 income statement, $37,800 $32,550, 50,400 and Administrative Expenses February March Quarter Febr February March Quarter
4 a. b. C. d. e. The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods: g. h. Current assets as of December 31: Cash. Accounts receivable Inventory. Buildings and equipment, net. Accounts payable Capital stock. Retained earnings December (actual) January. February. The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.) Actual and budgeted sales data are as follows: March April $6,000 $36,000 $9,800 $110,885 $32,550. $100,000 $30,135 Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold. Required: Using the data above: 1. Complete the following schedule: One-quarter of a month's inventory purchases is paid for in the month of purchase; the other three-quarters is paid for in the following month. The accounts payable at December 31 are the result of December purchases of inventory. f. Monthly expenses are as follows: commissions, $12,000; rent, $1,800; other expenses (exclud- ing depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $2,400 for the quarter and includes depreciation on new assets acquired during the quarter. Equipment will be acquired for cash: $3,000 in January and $8,000 in February. Management would like to maintain a minimum cash balance of $5,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $50,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that inter- est is not compounded. The company would, as far as it is able, repay the loan plus accumu- lated interest at the end of the quarter. $60,000 $70,000 $80,000 $85,000 $55,000 Cash sales Credit sales. Total collections... $28,000 36,000 $64,000 Schedule of Expected Cash Collections January February March Quarter
Transcribed Image Text:4 a. b. C. d. e. The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods: g. h. Current assets as of December 31: Cash. Accounts receivable Inventory. Buildings and equipment, net. Accounts payable Capital stock. Retained earnings December (actual) January. February. The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.) Actual and budgeted sales data are as follows: March April $6,000 $36,000 $9,800 $110,885 $32,550. $100,000 $30,135 Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold. Required: Using the data above: 1. Complete the following schedule: One-quarter of a month's inventory purchases is paid for in the month of purchase; the other three-quarters is paid for in the following month. The accounts payable at December 31 are the result of December purchases of inventory. f. Monthly expenses are as follows: commissions, $12,000; rent, $1,800; other expenses (exclud- ing depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $2,400 for the quarter and includes depreciation on new assets acquired during the quarter. Equipment will be acquired for cash: $3,000 in January and $8,000 in February. Management would like to maintain a minimum cash balance of $5,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $50,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that inter- est is not compounded. The company would, as far as it is able, repay the loan plus accumu- lated interest at the end of the quarter. $60,000 $70,000 $80,000 $85,000 $55,000 Cash sales Credit sales. Total collections... $28,000 36,000 $64,000 Schedule of Expected Cash Collections January February March Quarter
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