Water Sport Inc. manufactures a small personal water tube used for children learning to swim. Management is now preparing detailedbudgets for the third quarter, July through September, and has assembled the following Information to assista. The Marketing Department has estimated sales as follows for the remainder of the year (number of water tubes):JulyAugustSeptember7,108 October5,680 November3,5003,1004,680December2,600The selling price of the water tubes is $60.b. All sales are on account. Based on past experience, sales are expected to be collected in the following pattern:50%In the month of sale45%5%in the month following saleuncollectibleThe beginning accounts receivable balance (excluding uncollectible amounts) on July 1 will be $163,000.c. The company maintains finished goods inventories equal to 20% of the following month's sales. The Inventory of finished goods onJuly 1 will be 1,420 units.d. Each water tube requires 3 kilograms of synthetic polyisoprene rubber compound. To prevent shortages, the company would likethe Inventory of synthetic rubber compound on hand at the end of each month to be equal to 20% of the following month'sproduction needs. The Inventory of synthetic rubber compound on hand on July 1 will be 4,080 kilograms.e. The synthetic rubber compound costs $4.00 per kilogram. Water Sport pays for 70% of its purchases In the month of purchase; theremainder is paid for in the following month. The accounts payable balance for synthetic rubber compound purchases will be$13,200 on July 1.Required:1. Prepare a sales budget, by month and in total, for the third quarter. (Show your budget in both units of water tubes and collars.) Alsoprepare a schedule of expected cash collections, by month and in total, for the third quarterBalec budgetJulyAugustSeptemberQuarterBudgeted sales (units)Selling price per unitTotal budgeted sales

The Sales Budget is a budget that reports the estimated total number of units of finished goods to…

Required: 1. Prepare a sales budget, by month and in total, for the third quarter. (Show your budget in both units of water tubes and dollars.) Also prepare a schedule of expected cash collections, by month and in total, for the third quarter. Budgeted sales (units) Selling price per unit Total budgeted sales Balec budget July August Beptember Quarter

Required: 1. Prepare a sales budget, by month and in total, for the third quarter. (Show your budget in both units of water tubes and dollars.) Also prepare a schedule of expected cash collections, by month and in total, for the third quarter. Budgeted sales (units) Selling price per unit Total budgeted sales Balec budget July August Beptember Quarter

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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