The following assumptions are made by a company when preparing its cash budgetInvoices paid in the month after sales.Invoices paid in the second month after saleInvoices paid in the third month after saleBad debts50%30%15%5%Invoices are issued on the last day of each month. Customers paying in the month after saleare entitled to deduct a 4% settlement discount. Credit sales values for August to Novemberare budgeted as follows:AugustSeptemberOctoberNovember$100 000$120 000$80 000$70 000The amount budgeted to be received from credit sales in November isABCD]$89 400]$91000[ ]] $100 000$92 000

First, we need to calculate the amount received in the month after sales. This is 50% of the sales…

Answered: The following assumptions are made by a…

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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Similar questions

Carmen Company sells jar candles. The sales forecast (units) for the coming months is: April May June July August 230 250 220 170 230 Each candle costs $12. The ending inventory policy is 40% of next month's sales needs. April 1 inventory will be as expected under the policy. Carmen pays for purchases 30% in the month of purchase and 70% the following month. Accounts payable on April 1 is $3,150. a. Prepare a purchases budget for the quarter ending June 30. Note: Deductible values must be indicated with a minus sign. Budgeted unit sales) Plus: Ending inventory Less: Beginning inventory Budgeted purchases (units) Cost of merchandise (per unit) Total cost of merchandise purchases Merchandise Purchases Budget (Candles) For the Quarter Ending June 30 April May b. Prepare a cash payments budget for the quarter ending June 30. June Total
MARS PAUTANG Company is preparing its cash budget for the month of June. The following information is available concerning its accounts receivable:Estimated credit sales for June P200,000Actual credit sales for May P150,000Estimated collections in June for credit sales in June 20%Estimated collections in June for credit sales in May 70%Estimated collections in June for credit sales prior to May P12,000Estimated write-offs in June for uncollectible credit sales P8,000Estimated provision for bad debts in June for credit sales in June P7,000What are the estimated cash receipts from accounts receivable collections in June?
Kayak Company budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Receipts Cash payments January $ 524,000 $ 465,300 February 412,500 353,800 March 475,000 526,000 Kayak requires a minimum cash balance of $40,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $40,000 is used to repay loans at month-end. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1. Prepare monthly cash budgets for January, February, and March.
Frankie's Chocolate Co. reports the following information from its sales budget: Expected Sales: July August September $ 92,140 $ 107,685 $ 135,496 Cash sales are normally 35% of total sales and all credit sales are expected to be collected in the month following the date of sale. The total amount of cash expected to be received from customers in September is:
Evergreen Furniture, a retailing company, is preparing the cash budget for August. The following inventory information is available: Estimated payments in August for purchases in August Estimated purchases for August Estimated cost of goods sold for August Estimated payments in August for purchases in July Estimated payments in August for purchases prior to July Inventories at beginning of August Required: What are the estimated cash disbursements in August? Estimated cash disbursements 70% $ 2,428,000 2,560,000 672,000 160,000 658,000
Prepare a budgeted income statement for July. Please present your solution in a good form and income statement in good form.
The following information was taken from Trusted Care Company's cash budget for the month of April: Beginning cash balance Cash receipts Cash disbursements If the company has a policy of maintaining an end of the month minimum cash balance of $25,000, the amount the company would have to borrow is $10,000 $13,000 $11,000 $0 $27,000 62,000 75,000
Mitchell Company had the following budgeted sales for the first half of next year: The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Assume that the accounts recelvable balance on January 1 was $76,000. Of this amount, $60,000 represented uncollected December sales and $16,000 represented uncollected November sales. Glven these data, the total cash collected during January would be: Multiple Choice $138.000 $100,000 $196,000 $197,000
Nana Kay company must maintain a minimum cash balance of ghc 25000. At the beginning June, the company's cash balance was ghc 17000. Budgeted cash receipts for June are ghc 150000 and budgeted cash disbursement are ghc 201000. Budgeted net income for July totals ghc 11,000. How much will Nana Kay company need to borrow by the end of June?
Papst Company is preparing its cash budget for the month of May. The following information is available concerning its accounts receivable (based on sales made to customers on open account): Actual credit sales for March Actual credit sales for April Estimated credit sales for May Estimated collections in the month of sale Estimated collections in the first month after the month of sale Estimated collections in the second month after the month of sale Estimated provision for bad debts (made in the month of sale) $225,000 $ 293,000 $ 438,000 25% 60% 10% 5% The firm writes off all uncollectible accounts at the end of the second month after the month of sale. Required: Determine for Papst Company for the month of May: 1. The estimated cash receipts from accounts receivable collections. 2. The gross amount of accounts receivable at the end of the month (after appropriate write-off of uncollectible accounts). 3. The net amount of accounts receivable at the end of the month. 4. Recalculate…
Bright Minds Toy Company prepared the following sales budget for the second quarter. Projected sales for each of the first three months of operations are as follows: Sales Budget Cash Sales April 130,000 470,000 Sales on Account 600,000 Multiple Choice Bright Minds expects to collect 70% of the sales on account in the month of sale, 20% in the month following the sale, and the remainder in the second month following the sale. What is the ending accounts receivable balance that would be reported on the pro forma balance sheet prepared as of June 30? O O O $202,700 $149,500 $344.000 May 83,000 512,000 595,000 $106,400 June 155,000 505,000 660,000
Complete your calculations by filling in the highlighted cells. Discuss your observations about the way cash is collected if the company needs $150,000 per month for expenses.

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