Homework Help is Here – Start Your Trial Now!
Business
Accounting
Required: 1. Prepare schedules showing budgeted merchandise purchases for May and June. 2. Prepare a schedule showing budgeted cash disbursements during June. 3. Prepare a schedule showing budgeted cash collections during May. counts receivable on May 31.

Required: 1. Prepare schedules showing budgeted merchandise purchases for May and June. 2. Prepare a schedule showing budgeted cash disbursements during June. 3. Prepare a schedule showing budgeted cash collections during May. counts receivable on May 31.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

A-2

D. Tomlinson Retail seeks your assistance in developing cash and other budget information for May, June, and July. The store expects to have the following balances at the end of April: Cash Accounts receivable Inventories Accounts payable The firm follows these guidelines in preparing its budgets: $ 101,200 901,000 680,400 282,808 • Sales. All sales are on credit with terms of 3/10, n/30. Tomlinson bills customers on the last day of each month. The firm books receivables at gross amounts and collects 60% of the billings within the discount period, 25% by the end of the month, and 9% by the end of the second month. The firm's experience suggests that 6% is likely to be uncollectible and is written off at the end of the third month. . Purchases and expenses. All purchases and expenses are on open account. The firm pays its payables over a 2-month period with 54% paid in the month of purchase. Each month's units of ending inventory should equal 135% of the next month's cost of sales. The cost of each unit of inventory is $40. Selling, general, and administrative (SG&A) expenses, of which $1,600 is depreciation, equal 15% of the current month's sales. Actual and projected sales follow: Month March April May Dollars $ 750,000 Units 12,500 768,000 12,800 756,000 12,600 Month June July August Dollars $ 726,000 762,000 774,000 Units 12,100 12,700 12,900 Required: 1. Prepare schedules showing budgeted merchandise purchases for May and June. 2. Prepare a schedule showing budgeted cash disbursements during June. 3. Prepare a schedule showing budgeted cash collections during May. 4. Determine gross and net balances of accounts receivable on May 31.
Transcribed Image Text:D. Tomlinson Retail seeks your assistance in developing cash and other budget information for May, June, and July. The store expects to have the following balances at the end of April: Cash Accounts receivable Inventories Accounts payable The firm follows these guidelines in preparing its budgets: $ 101,200 901,000 680,400 282,808 • Sales. All sales are on credit with terms of 3/10, n/30. Tomlinson bills customers on the last day of each month. The firm books receivables at gross amounts and collects 60% of the billings within the discount period, 25% by the end of the month, and 9% by the end of the second month. The firm's experience suggests that 6% is likely to be uncollectible and is written off at the end of the third month. . Purchases and expenses. All purchases and expenses are on open account. The firm pays its payables over a 2-month period with 54% paid in the month of purchase. Each month's units of ending inventory should equal 135% of the next month's cost of sales. The cost of each unit of inventory is $40. Selling, general, and administrative (SG&A) expenses, of which $1,600 is depreciation, equal 15% of the current month's sales. Actual and projected sales follow: Month March April May Dollars $ 750,000 Units 12,500 768,000 12,800 756,000 12,600 Month June July August Dollars $ 726,000 762,000 774,000 Units 12,100 12,700 12,900 Required: 1. Prepare schedules showing budgeted merchandise purchases for May and June. 2. Prepare a schedule showing budgeted cash disbursements during June. 3. Prepare a schedule showing budgeted cash collections during May. 4. Determine gross and net balances of accounts receivable on May 31.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Receivables Management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS