Alpha CD's budgeted cash receipts in February are: The Alpha CD Company's budgeted income statement reflects the following amounts:SalesP120,000110,000125,000130,000PurchasesP78,00066,00081,2584,500ExpensesP24,00024,20027,00028,600JanuaryFebruaryMarchAprilSales are collected 50% in the month of sale, 30% in the month following sale, and 19% in thesecond month following sale. One percent of sales is uncollectible and expensed at the end ofthe year.Alpha CD pays for all purchases in the month following purchase and takes advantage of a 3%discount. The following balances are as of January 1:CashAccounts receivable*Accounts payableP88,00058,00072,000*Of this balance, P35,000 will be collected in January and the remaining amount will becollected in February.The monthly expense figures include P5,000 of depreciation. The expenses are paid in themonth incurred.

The question is based on the concept of Financial management.

Answered: The Alpha CD Company's budgeted income…

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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McMichael Inc. collects 90% of its sales on account in the month of the sale and 10% in the month following the sale. If sales on account are budgeted to be $495,000 for September and $431,000 for October, what are the budgeted cash receipts from sales on account for October?$
Aggrava Limited is currently preparing budgets for September to December. Its estimated sales figures in units are as follows: (financial information) = September October November December Sales (units) 5,569 14,234 14,847 15,121 Inventories at 31 August totalled 16,234 units, and inventories are to be kept at a constant level for all months except December, when opening inventories on 1 December are to be increased to 23,118. Inventories will revert to the normal level on 31 December. Inventories will cost £2 per unit throughout the period, and suppliers allow Aggrava Ltd to pay in the month following an order. Other relevant information is that 3,497 units were bought in August. Requirement 1: Prepare Aggrava Ltd's inventories budget (in units) for September to December. Requirement 2: Prepare the information relevant to inventories purchases that would appear in the cash budget for the period. Question content area bottom Part…
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