Oneida Company's operations began in August. August sales were $180,000 and purchases were $120,000. The beginning cashbalance for september is $32,500. Oneida's owner approaches the bank for a $104,000 loan to be made on September 2 and repaidon November 30. The bank's loan officer asks the owner to prepare monthly cash budgets. Its budgeted sales, merchandisepurchases, and cash payments for other expenses for the next three months follow.BudgetedSalesMerchandise purchasesCash paymentsSalariesRentInsuranceRepayment of loanInterest on loanSeptemberOctober$ 220,000 $ 485,000225,000November$ 490,000205,000201,00031,00031,00031,00012,00012,00012,0004,1004,1004,1001,0401,040104,0001,040All sales are on credit where 72% of credit sales are collected in the month following the sale, and the remaining 28% collected in thesecond month following the sale. All merchandise is purchased on credit; 82% of the balance is paid in the month following apurchase, and the remaining 18% is paid in the second month.Required:Prepare the following for the months of September, October, and November.1. Schedule of cash receipts from sales.2. Schedule of cash payments for direct materials.3. Cash budget.

2.Schedule of Cash Payments for Direct Materials82% of purchases are paid in the month following the…

Answered: Oneida Company's operations began in…

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 18E

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