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On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company's sales are made on account. The following information has been provided by Spicer's management. Month Credit Sales January $300,000 (actual) February 400,000 (actual) March 600,000 (estimated) April 700,000 (estimated) May 800,000 (estimated) The company's collection activity on credit sales historically has been as follows. Collections in the month of the sale 50% Collections one month after the sale 30 Collections two months after the sale 15 Uncollectible accounts. 5 Spicer's total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400,000 a month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter. Compute Spicer's budgeted cash balance at the ends of March. April. and May.

On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company's sales are made on account. The following information has been provided by Spicer's management. Month Credit Sales January $300,000 (actual) February 400,000 (actual) March 600,000 (estimated) April 700,000 (estimated) May 800,000 (estimated) The company's collection activity on credit sales historically has been as follows. Collections in the month of the sale 50% Collections one month after the sale 30 Collections two months after the sale 15 Uncollectible accounts. 5 Spicer's total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400,000 a month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter. Compute Spicer's budgeted cash balance at the ends of March. April. and May.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
Section: Chapter Questions
Problem 3PB: Budgeted income statement and supporting budgets The budget director of Gold Medal Athletic Co.,...
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Budgeting an Ending Cash Balance On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company's sales are made on account. The following information has been provided by Spicer's management. Month Credit Sales January $300,000 (actual) February 400,000 (actual) March 600,000 (estimated) April 700,000 (estimated) May 800,000 (estimated) The company's collection activity on credit sales historically has been as follows. Collections in the month of the sale 50% Collections one month after the sale 30 Collections two months after the sale 15 Uncollectible accounts. 5 Spicer's total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400,000 a month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter. Compute Spicer's budgeted cash balance at the ends of March, April, and May.
Transcribed Image Text:Budgeting an Ending Cash Balance On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company's sales are made on account. The following information has been provided by Spicer's management. Month Credit Sales January $300,000 (actual) February 400,000 (actual) March 600,000 (estimated) April 700,000 (estimated) May 800,000 (estimated) The company's collection activity on credit sales historically has been as follows. Collections in the month of the sale 50% Collections one month after the sale 30 Collections two months after the sale 15 Uncollectible accounts. 5 Spicer's total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400,000 a month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter. Compute Spicer's budgeted cash balance at the ends of March, April, and May.
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