**Morgan Company's Budgeted Income Statement**The following table reflects Morgan Company’s budgeted amounts for sales, purchases, and expenses over four months:| | **Sales** | **Purchases** | **Expenses** ||----------|-----------|---------------|--------------|| January | $120,000 | $78,000 | $24,000 || February | $110,000 | $66,000 | $24,200 || March | $125,000 | $81,250 | $27,000 || April | $130,000 | $84,500 | $28,600 |**Sales Collection Details:**- 50% of sales are collected in the month of sale.- 30% are collected in the month following the sale.- 19% are collected in the second month following the sale.- 1% of sales is uncollectible and expensed at the end of the year.**Purchases and Discounts:**Morgan pays for all purchases in the month following purchase and takes advantage of a 3% discount.**Opening Balances (as of January 1):**- Cash: $88,000- Accounts Receivable: $58,000 - $35,000 collected in January. - Remaining amount collected in February.- Accounts Payable: $72,000**Additional Information:**- Monthly expenses include $5,000 of depreciation.- Expenses are paid in the month incurred.**Questions:**A. What are Morgan’s budgeted cash receipts in February?B. What are Morgan’s budgeted cash payments in February?C. What is Morgan’s expected cash balance at the end of February?

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Morgan Company's budgeted income statement reflects the following amounts: Sales Purchases Expenses January $120,000 $78,000 $24,000 February 110,000 66,000 24,200 March 125,000 81,250 27,000 April 130,000 84,500 28,600 Sales are collected 50% in the month of sale, 30% in the month following sale, and 19% in the second month following sale. One percent of sales is uncollectible and expensed at the end of the year. Morgan pays for all purchases in the month following purchase and takes advantage of a 3% discount. The following balances are as of January 1: Cash $88,000 Accounts Receivable* $58,000 Accounts payable $72,000 *Of this balance, $35,000 will be collected in January and the remaining amount will be collected in February. The monthly expense figures include $5,000 of depreciation. The expenses are paid in the month incurred. A. Morgan's budgeted cash receipts in February are: B. Morgan's budgeted cash payments in February are: C. Morgan's expected cash balance at the end of February is:

Morgan Company's budgeted income statement reflects the following amounts: Sales Purchases Expenses January $120,000 $78,000 $24,000 February 110,000 66,000 24,200 March 125,000 81,250 27,000 April 130,000 84,500 28,600 Sales are collected 50% in the month of sale, 30% in the month following sale, and 19% in the second month following sale. One percent of sales is uncollectible and expensed at the end of the year. Morgan pays for all purchases in the month following purchase and takes advantage of a 3% discount. The following balances are as of January 1: Cash $88,000 Accounts Receivable* $58,000 Accounts payable $72,000 *Of this balance, $35,000 will be collected in January and the remaining amount will be collected in February. The monthly expense figures include $5,000 of depreciation. The expenses are paid in the month incurred. A. Morgan's budgeted cash receipts in February are: B. Morgan's budgeted cash payments in February are: C. Morgan's expected cash balance at the end of February is:

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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