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S&P Enterprises needs a cash budget for March. The following information is available. Data Actual January and February and expected March sales: Cash sales Sales on account Total Sales Accounts Receivable Collections: Month of sale D 1 Month following sale 2 Second month following sale 3 Uncollectible 4 Accounts payable for inventory purchases, March 1 balance 5 Budgeted inventory purchases in March 5 Inventory payments: 7 Month of purchase B Month following purchase 9 O Total budgeted selling & administrative expenses in March (including depreciation) 1 Budgeted depreciation in March (included in total selling and admin exp) 2 January $1,600 25,000 $26,600 15% 60% 22% 3% $10,500 $23,500 60% 40% $12,500 $3,200 February $3,750 30,000 $33,750 March $5,100 40,000 $45,100

S&P Enterprises needs a cash budget for March. The following information is available. Data Actual January and February and expected March sales: Cash sales Sales on account Total Sales Accounts Receivable Collections: Month of sale D 1 Month following sale 2 Second month following sale 3 Uncollectible 4 Accounts payable for inventory purchases, March 1 balance 5 Budgeted inventory purchases in March 5 Inventory payments: 7 Month of purchase B Month following purchase 9 O Total budgeted selling & administrative expenses in March (including depreciation) 1 Budgeted depreciation in March (included in total selling and admin exp) 2 January $1,600 25,000 $26,600 15% 60% 22% 3% $10,500 $23,500 60% 40% $12,500 $3,200 February $3,750 30,000 $33,750 March $5,100 40,000 $45,100

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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**S&P Enterprises: Cash Budget Information for March** **Data:** **Actual January and February and Expected March Sales:** - **Cash Sales:** - January: $1,600 - February: $3,750 - March: $5,100 - **Sales on Account:** - January: $25,000 - February: $30,000 - March: $40,000 - **Total Sales:** - January: $26,600 - February: $33,750 - March: $45,100 **Accounts Receivable Collections:** - Month of Sale: 15% - Month Following Sale: 60% - Second Month Following Sale: 22% - Uncollectible: 3% **Accounts Payable for Inventory Purchases:** - March 1 Balance: $10,500 - Budgeted Inventory Purchases in March: $23,500 **Inventory Payments:** - Month of Purchase: 60% - Month Following Purchase: 40% **Total Budgeted Selling & Administrative Expenses in March (Including Depreciation):** $12,500 - Budgeted Depreciation in March (Included in Total Selling and Admin Expenses): $3,200 **Other Budgeted Cash Disbursements in March:** The table provides detailed financial data for S&P Enterprises as they plan their cash flow for March, specifying sales figures, accounts receivable collections rates, inventory payment schedules, and budgeted expenses.
Transcribed Image Text:**S&P Enterprises: Cash Budget Information for March** **Data:** **Actual January and February and Expected March Sales:** - **Cash Sales:** - January: $1,600 - February: $3,750 - March: $5,100 - **Sales on Account:** - January: $25,000 - February: $30,000 - March: $40,000 - **Total Sales:** - January: $26,600 - February: $33,750 - March: $45,100 **Accounts Receivable Collections:** - Month of Sale: 15% - Month Following Sale: 60% - Second Month Following Sale: 22% - Uncollectible: 3% **Accounts Payable for Inventory Purchases:** - March 1 Balance: $10,500 - Budgeted Inventory Purchases in March: $23,500 **Inventory Payments:** - Month of Purchase: 60% - Month Following Purchase: 40% **Total Budgeted Selling & Administrative Expenses in March (Including Depreciation):** $12,500 - Budgeted Depreciation in March (Included in Total Selling and Admin Expenses): $3,200 **Other Budgeted Cash Disbursements in March:** The table provides detailed financial data for S&P Enterprises as they plan their cash flow for March, specifying sales figures, accounts receivable collections rates, inventory payment schedules, and budgeted expenses.
**Budget Preparation and Cash Management** **Details:** - **Equipment Purchases:** $14,000 - **Dividends to be Paid:** $2,000 - **Minimum Cash Balance to be Maintained:** $10,000 - **March 1 Cash Balance:** $11,500 - **March 1 Outstanding Borrowings:** $0 - **March 1 Interest Due:** $0 The company maintains a line of credit to support the cash balance as necessary. When preparing budgets, financial data is stored separately from the actual budget and schedules. **Required Tasks:** 1. Create the following schedules using the provided data (use cells A4 to B31): 2. **Schedule of Expected Cash Collections for March.** 3. **Schedule of Expected Cash Disbursements for Inventory Purchases for March.** 4. **Cash Budget for March.** Indicate any borrowings needed for March in the financing section, noting that interest will be paid in the following month. *Instructions: Use cells A4 to B31 to complete these tasks.*
Transcribed Image Text:**Budget Preparation and Cash Management** **Details:** - **Equipment Purchases:** $14,000 - **Dividends to be Paid:** $2,000 - **Minimum Cash Balance to be Maintained:** $10,000 - **March 1 Cash Balance:** $11,500 - **March 1 Outstanding Borrowings:** $0 - **March 1 Interest Due:** $0 The company maintains a line of credit to support the cash balance as necessary. When preparing budgets, financial data is stored separately from the actual budget and schedules. **Required Tasks:** 1. Create the following schedules using the provided data (use cells A4 to B31): 2. **Schedule of Expected Cash Collections for March.** 3. **Schedule of Expected Cash Disbursements for Inventory Purchases for March.** 4. **Cash Budget for March.** Indicate any borrowings needed for March in the financing section, noting that interest will be paid in the following month. *Instructions: Use cells A4 to B31 to complete these tasks.*
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