Millen’s managers have made the following additional assumptions and estimatesEstimated sales for July and August are $310,000 and $330,000, respectively.Each month’s sales are 20% cash sales and 80% credit sales. Each month’s credit sales are collected 30% in the month of sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.Each month’s ending inventory must equal 20% of the cost of next month’s sales. The cost of goods sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.Monthly selling and administrative expenses are always $70,000. Each month $10,000 of this total amount is depreciation expense and the remaining $60,000 relates to expenses that are paid in the month they are incurred.The company does not plan to buy or sell any plant and equipment during July. It will not borrow any money, pay a dividend, issue any common stock, or repurchase any of its own common stock during July.( Calculate the estimated accounts receivable turnover and inventory turnover for the month of July) Calculate the estimated accounts receivable turnover and inventory turnover for the month of July. (Round your answers to 2decimal places.)Accounts receivable turnoverInventory turnover4.84 Millen Corporation is a merchandiser that is preparing a master budget for the month of July. The company's balance sheet as of June30th is shown below:Millen CorporationBalance SheetJune 30Assets$ 120,000166, 00037, 200554,800CashAccounts receivableInventoryPlant and equipment, net of depreciationTotal assets$ 878,000Liabilities and Stockholders' EquityAccounts payable$ 93,000586,000199,000Common stockRetained earningsTotal liabilities and stockholders' equity$ 878,000

ACCOUNT RECEIVABLE; An account receivable is defined as it is money that has not been paid by…

Answered: Millen’s managers have made the…

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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Millen’s managers have made the following additional assumptions and estimates

Estimated sales for July and August are $310,000 and $330,000, respectively.
Each month’s sales are 20% cash sales and 80% credit sales. Each month’s credit sales are collected 30% in the month of sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.
Each month’s ending inventory must equal 20% of the cost of next month’s sales. The cost of goods sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.
Monthly selling and administrative expenses are always $70,000. Each month $10,000 of this total amount is depreciation expense and the remaining $60,000 relates to expenses that are paid in the month they are incurred.
The company does not plan to buy or sell any plant and equipment during July. It will not borrow any money, pay a dividend, issue any common stock, or repurchase any of its own common stock during July.

( Calculate the estimated accounts receivable turnover and inventory turnover for the month of July)

Millen Corporation is a merchandiser that is preparing a master budget for the month of July. The company's balance sheet as of June
30th is shown below:
Millen Corporation
Balance Sheet
June 30
Assets
$ 120,000
166, 000
37, 200
554,800
Cash
Accounts receivable
Inventory
Plant and equipment, net of depreciation
Total assets
$ 878,000
Liabilities and Stockholders' Equity
Accounts payable
$ 93,000
586,000
199,000
Common stock
Retained earnings
Total liabilities and stockholders' equity
$ 878,000

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