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Required: 1. The budgeted cash collections for the month of July would be a. P547,500 b. P539,520 c. P556,020 d P391,020 2. The budgeted cash payments for the month of September would be a. P518,000 b. P533,600 c. P468,800 d. P459,600 3. The projected net income for September would be a. P122,200 b. P112,000 c. P28,000 d. P38,000 4. The balance of accounts receivable at the end of July, assuming that no uncollectible accounts are written off for July would be a. P622,500 b. P645,660 c. P613,980 d. P630,480

Required: 1. The budgeted cash collections for the month of July would be a. P547,500 b. P539,520 c. P556,020 d P391,020 2. The budgeted cash payments for the month of September would be a. P518,000 b. P533,600 c. P468,800 d. P459,600 3. The projected net income for September would be a. P122,200 b. P112,000 c. P28,000 d. P38,000 4. The balance of accounts receivable at the end of July, assuming that no uncollectible accounts are written off for July would be a. P622,500 b. P645,660 c. P613,980 d. P630,480

FINANCIAL ACCOUNTING
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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MASTER BUDGET Questions 1 thru 4 are based on the following information. For purposes of preparing the cash projections and other budget estimates for the third quarter of 2021, the following information is presented to you by the management of Letran Corporation: Second Quarter Sales Data Pesos Units 10,600 530,000 550,000 11,000 570,000 11.400 April May June Projected sales for the next Pesos four months July August September October 540,000 550,000 560,000 580,000 All sales are on a charge basis and billed at the end of the month. A 5% discount is given on collections within 15 days from the billing date. Sales collections are generally made as follows: 70% within the month following the billing date with 40% of this being collected within the discount period 27% on the second month following the billing date 3% considered uncollectible Merchandise purchases are generally paid as follows: 50% within the month they are incurred 50% after the month they are incurred Units 10,800 11,000 11,200 11,600 Ending inventory in units (cost per unit is P40) is 30% higher than the following month's sales in units. Operating expenses are on a cash basis and are estimated to be 15% of the current month's sales including monthly depreciation of P10,000. As of June 30, 2021, the Accounts Receivable balance was P630.000 and Merchandise Inventory was P565,000. Required: 1. The budgeted cash collections for the month of July would be a. P547,500 b. P539,520 c. P556,020 d. P391,020 2. The budgeted cash payments for the month of September would be a. P518,000 b. P533,600 c. P468,800 d. P459,600 3. The projected net income for September would be a. P122,200 b. P112,000 c. P28,000 d. P38,000 4. The balance of accounts receivable at the end of July. assuming that no uncollectible accounts are written off for July would be a. P622,500 b. P645,660 c. P613,980 d. P630,480
Transcribed Image Text:MASTER BUDGET Questions 1 thru 4 are based on the following information. For purposes of preparing the cash projections and other budget estimates for the third quarter of 2021, the following information is presented to you by the management of Letran Corporation: Second Quarter Sales Data Pesos Units 10,600 530,000 550,000 11,000 570,000 11.400 April May June Projected sales for the next Pesos four months July August September October 540,000 550,000 560,000 580,000 All sales are on a charge basis and billed at the end of the month. A 5% discount is given on collections within 15 days from the billing date. Sales collections are generally made as follows: 70% within the month following the billing date with 40% of this being collected within the discount period 27% on the second month following the billing date 3% considered uncollectible Merchandise purchases are generally paid as follows: 50% within the month they are incurred 50% after the month they are incurred Units 10,800 11,000 11,200 11,600 Ending inventory in units (cost per unit is P40) is 30% higher than the following month's sales in units. Operating expenses are on a cash basis and are estimated to be 15% of the current month's sales including monthly depreciation of P10,000. As of June 30, 2021, the Accounts Receivable balance was P630.000 and Merchandise Inventory was P565,000. Required: 1. The budgeted cash collections for the month of July would be a. P547,500 b. P539,520 c. P556,020 d. P391,020 2. The budgeted cash payments for the month of September would be a. P518,000 b. P533,600 c. P468,800 d. P459,600 3. The projected net income for September would be a. P122,200 b. P112,000 c. P28,000 d. P38,000 4. The balance of accounts receivable at the end of July. assuming that no uncollectible accounts are written off for July would be a. P622,500 b. P645,660 c. P613,980 d. P630,480
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