Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business-September, October, and November-are $241,000, $314,000, and $415,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections expected in November from accounts receivable are projected to be: O a. $331.632 Ob. $232.400 O c. $188.440 O d. $276.360

Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business-September, October, and November-are $241,000, $314,000, and $415,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections expected in November from accounts receivable are projected to be: O a. $331.632 Ob. $232.400 O c. $188.440 O d. $276.360

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

Big Wheel, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. Sales on account are budgeted to be $17,100 for March and $40,800 for April. What are the budgeted cash receipts from sales on account for April?
A company is preparing its cash budget for the first quarter of the year. It has $8700 in cash at the beginning of the period. Cash sales for the quarter are budgeted at $182000. Selling and administrative expenses are budgeted at $59000, which includes $11000 depreciation. Cash expenses are paid in the month incurred. Cash payment for inventory purchases are budgeted at $139500. The desired cash balance on March 31 is $10400. How much financing will the company need during the quarter? O $3200 O $0 O $7200 O $7800
The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): Budgeted unit sales. The selling price of the company's product is $26 per unit. Management expects to collect 75% of sales in the quarter in which the sales are made, 20% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $73,600. The company expects to start the first quarter with 2,540 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 20% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 2,740 units. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 12,700 13,700 15,700 14,700 Required: 1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole. 2.…
Royal Cigar Company is preparing a budget for cash collections. Its sales for November andDecember are estimated as $90,000 and $100,000, respectively. Past practice indicates that sales inany given month are collected as follows: month of sale, 75%; month following the month of sale,20%; uncollectible accounts, 5%. The company allows a 2% discount for cash collections in themonth of sale. What is the net cash estimated to be collected in December?
The company pays for its purchases within 10 days of purchase, so assume that one-third of the purchases of any month are due and paid for in the following month. The cost of the merchandise purchased is $10 per case. At the end of each month, it is desired to have an inventory equal in units to 75% of the following month's sales in units. Exclusive of bad debts, total budgeted selling and general administrative expenses for the fiscal year are estimated at$80,600, of which $19,000 is fixed expense (which includes a $5,200 annual depreciation charge). this is incurred fixed expenses uniformly throughout the year. The balance of the selling and general administrative expenses varies with sales. Expenses are paid as incurredRequirementl.
Orange Company has sales of $50,000 in March and $60,000 in April. Forecast sales for May, June, and July are $70,000, $80,000, and $100,000, respectively. The firm has a cash balance of $5,000 on 1 May and wishes to maintain a minimum cash balance of $5,000. Given the following data, prepare and interpret a cash budget for the months of May, June, and July. • The firm makes 20% of sales for cash, 60% are collected in the next month, and the remaining 20% are collected in the second month following sale • The firm recelves other income of $2,000 per month • The firm's actual or expected purchases, all made for cash, are $50,000, $70,000, and $80,000 for the months of May through July, respectively • Rent is $3,000 per month • Wages and salaries are 10% of the previous month's sales • Cash dividends of $3,000 will be paid in June • Payment of principal and interest of $4,000 is due in June • A cash purchase of equipment costing $6,000 is scheduled in July • Taxes of $6,000 are due in…
ABC Company's budgeted sales for June, July, and August are 14,200, 18,200, and 16,200 units respectively. The selling price for each unit is $15. Based on past experience, ABC expects that 40% of a month's sales will be collected in the month of sale, 55% in the following month, and 2% in the second month following the sale. Required: Prepare an analysis of cash receipts from sales for ABC Company for August. Budgeted sales units Unit selling price Budgeted sales revenue August collections: Current month's sales. Prior month's sales. Second prior month's sales. Total collections June July August
McFarland Company makes 70 percent of its sales in cash. Credit sales are collected as follows: 70 percent in the month of sale and 30 percent in the month following the sale. McFarland's budgeted sales for upcoming months follow: $ 24,200 42,000 40,000 38,000 June July August September Required: Compute McFarland's expected cash receipts for August Budgeted Cash Receipts
Dax, Inc., collects its accounts receivable as follows: 30% in the month ofsale, 60% in the next month, and 8% in the second month after the sale; 2%are uncollectible. Budgeted sales for the next four months are March, $16,000; April, $22,000; May, $19,000; and June, $23,000. Budgeted collections forJune area. $20,060.b. $20,380.c. $21,260.d. $21,380.
Prince Charles Island Company has expected sales of $6,000 in September, $10,000 in October, $16,000 in November, and $12,000 in December. Cash sales are 20 percent and credit sales are 80 percent of total sales. Historically, 40 percent of receivables are collected in the month after the sale, and the remaining 60 percent collected two months after. Assume that the company's cash payments for November are $13,000, and December $6,000. The beginning cash balance in November is $5,000, which is the desired minimum balance. a. Prepare a cash receipts schedule for November and December. Sales Credit sales Cash sales Collections in the month after credit sales Collections two months after credit sales Total cash receipts Prince Charles Island Company Cash Receipts Schedule September S Cash receipts Cash payments Net cash flow Prince Charles Island Company Cash Budget November Beginning cash balance Cumulative cash balance. Monthly loan or (repayment). Cumulative loan balance. Ending cash…
The Model Company is to begin operations in April. It has budgeted April sales of $70,000, May sales of $74,000, June sales of $80,000, July sales of $82,000, and August sales of $78,000. Note that 10% of each month's sales is expected to represent cash sales; 75% of the balance is expected to be collected in the month following the sale, 17% the second month, 6% the third month, and the balance is expected to be uncollectible. What is the amount of cash to be collected in the month of July?
Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $300,000, and $406,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale. The cash collections in November are a.$101,500 b.$382,150 c.$213,150 d.$458,580