Question 7 : MNO Company's credit sales policy is to have: • 50% of the sales amount in cash • 30% collected after one month • 20% after two months. The purchasing policy is to pay 60% in cash and the rest is to be paid after one month. Required: a) Calculate the net accounting profit for December. b) Calculate the net cash flow for December. c) Comment on the difference between the two previous answers. Item October November December Sales 400,000 350,000 450,000 Purchases 350,000 340,000 420,000

Question 7 : MNO Company's credit sales policy is to have: • 50% of the sales amount in cash • 30% collected after one month • 20% after two months. The purchasing policy is to pay 60% in cash and the rest is to be paid after one month. Required: a) Calculate the net accounting profit for December. b) Calculate the net cash flow for December. c) Comment on the difference between the two previous answers. Item October November December Sales 400,000 350,000 450,000 Purchases 350,000 340,000 420,000

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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Qw.3. Craig has projected sales to be $90,400 in April; $96,400 in May; $104,500 in June and $93,600 in July. The history of Craig’s sales indicates 20% cash and the remaining 80% on credit. The company’s collection history indicates that credit sales are collected as follows: 30% collected in the month of the sale60% collected in the month after the sale8% collected two months after the sale2% of credit sales are never collected
B. Problem 1. Galaxy Lighting Company manufactures and sells lighting fixtures. Estimated sales for the next three months are: September P 350,000 October 500,000 November 400,000 Sales for August were $400,000. All sales are on account. Galaxy Lighting Company estimates that 60% of the accounts receivable are collected in the month of sale with the remaining 40% collected the following month. The units sell for $30 each. The cash balance for September 1 is $100,000. Generally, 60% of purchases are due and payable in the month of purchase with the remainder due the following month. Purchase cost per unit for materials is $18. The company maintains an end-of-the-month inventory of 1,000 units plus 10% of next month's unit sales. In addition to the information given, selling and administrative expenses paid in cash are $120,000 per month. Requirement: Prepare a monthly cash budget for September and October for Galaxy Lighting Company.
1. A company has a sales plan for 2020 based on the estimated end of the month as follows: Month Total sales July Rp 28.000,00 August 35.000,00 September 42.000,00 Payment terms are set: 3/20/net 30. Based on the experience of the customer's payment method as follows: 60% of sales every month is collected at 20 days after the month of pend. 30% accumulated in the time after 20 days in the same month, i.e. in the first month after the month of Dec. 10% collected in the second month after the month of Dec. Required: prepare a schedule/budget for collection of receivables (receivables collection budget)
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Current Attempt in Progress Manuel Company had cash sales of $86,800 (including taxes) for the month of June. Sales are subject to 8.50% sales tax. Prepare the entry to record the sales. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
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1. What is the expected cash collection for May? 2. What is the expected cash disbursements in May? 3. What is the expected cash balance at May 31?
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The following information pertains to Z Corporation: Month July August September October November December Sales $30,000 34,000 38,000 42,000 48,000 60,000 Purchases $10,000 12,000 14,000 16,000 18,000 20,000 Cash is collected from customers in the following manner: Month of sale (2% cash discount) 30% 50% Month following sale Two months following the sale Amount uncollectible 5% 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. 15% Required: a. Prepare a summary of cash collections for the 4th quarter. b. Prepare a summary of cash disbursements for the 4th quarter.