The Gingham Company's budgeted income statement reflects the following amounts:SalesPurchases$ 120,000$ 78,000110,00066,000125,00081,25084,500JanuaryFebruaryMarchApril130,000Sales are collected 50% in the month of sale, 30% the month following sale, and 19% in the second month following.sale. 1 percent of sales is uncollectible and expensed at the end of the year.CashGingham pays for all purchases in the month following purchase and takes advantage of a 3% discount. The followingbalances are as of January 1:Expenses$ 24,00024,20027,00028,600Accounts receivable *Accounts payable$ 88,00058,00072,000*Of this balance, $35,000 will be collected in January and the remaining amount will be collected in February.The monthly expense figures include $5,000 of depreciation. The expenses are paid in the month incurred.1) Gingham's expected cash balance at the end of January is:2) Gingham's budgeted cash receipts in February are:

A cash budget is prepared after preparing a schedule for cash receipts and cash payments. It…

Answered: The Gingham 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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Primary Co. has budgeted sales of $228,000 in October and $312,000 in November. The company expects it will collect 70% of cash from sales in the month of the sale. The remaining 30% of cash will be collected the next month. What is the expected cash to be collected in November? $68,400 $286,800 $312,000 $253,200
Assume the following budgeted information for a merchandising company: Budgeted sales (all on credit) for November, December, and January are $248,000, $218,000, and $209,000, respectively. • Cash collections related to credit sales are expected to be 70% in the month of sale, 30% in the month following the sale. • The cost of goods sold is 70% of sales. • Each month's ending inventory equals 20% of next month's cost of goods sold. • 30% of each month's merchandise purchases are paid in the current month and the remainder is paid in the following month. • Monthly selling and administrative expenses that are paid in cash in the month incurred total $25,000. • Monthly depreciation expense is $9.000. . The budgeted net operating income for December would be: Multiple Choice $40,400 $25,734 $16,734 $31,400
Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $243,000, $308,000, and $429,000, sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected respectively, for September, October, and November. The company expects in the month of the sale and 30% in the month following the sale. The cash collections expected in October are a. $293,375 b. $221,080 Oc. $269,680 Od. $282,680 ?
Kuzma Foods, Inc. has budgeted sales for June and July at $680,000 and $765,000, respectively. Sales are 80% credit, of which 60% is collected in the month of sale and 40% is collected in the following month. What is the budgeted Accounts Receivable balance on July 31? OA. $306,000 OB. $217,600 OC. $612,000 OD. $244,800
Farm Supply Company's budgeted monthly sales are as follows: April $780,000, May $560,000, and June $900,000. Sales are 60% cash and 40% on account. Farm Supply collects all its accounts receivable in the month following the sale. Cost of goods sold is budgeted at 75% of sales and ending inventory is budgeted at 20% of the next month's cost of goods sold. All inventory purchases are paid 28% in the month of purchase and 72% in the following month. What are Farm Supply's budgeted cash collections for the month of May? O $336,000 O $414,000 O $648,000 O $747,000 O None of the above
All of Gaylord Corporation's sales are on account. Thirty-five percent of the sales on account are collected in the month of sale, 45% in the month following sale, and the remainder are collected in the second month following sale. The following are budgeted sales data for the company: Total sales January $50,000 O $24,000 O $37,000 O $41,000 O $51,000 February $60,000 March $40,000 What is the amount of cash that should be collected in March? April $30,000
Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $245,000, $302,000, and $402,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the The cash collections expected in October are O & $267,120 O & $218120 Oc $278,520 O d. $289.175
The following information is available to assist you in preparing a company's cash budget. a. The cash balance on July 1 is $41,000. b. Actual sales for May and June and expected sales for July are as follows: May $ 68,400 $ 87,400 $ 95,800 $ 415,000 $ 614,000 $ 692,000 June July Cash sales Sales on account Sales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected In the second month following sale. The remaining 2% is uncollectible. C. Purchases of inventory will total $376,000 for July. Thirty percent of a month's Inventory purchases are paid during the month of purchase. The accounts payable remaining from June's inventory purchases total $174,500, all of which will be paid in July. d. Selling and administrative expenses are budgeted at $452,000 for July. Of this amount, $63,500 is for depreciation. e. A new web server for the Marketing Department costing $86,500 will be…
Woodpecker Co. has $292,000 in accounts receivable on January 1. Budgeted sales for January are $979,000. Woodpecker Co. expects to sell 20% of its merchandise for cash. Of the remaining 80% of sales on account, 75% are expected to be collected in the month of sale and the remainder the following month. The January cash collections from sales are Oa. $1,367,200 Ob. $1,075,200 Oc. $645,120 Od. $860,160
Jacob Long, the controller of Arvada Corporation, is trying to prepare a sales budget for the coming year. The income statements for the last four quarters follow: Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income First Quarter Second Quarter Third Quarter Fourth Quarter $ 174,000 $ 264,000 87,000 132,000 87,000 132,000 $ 214,000 107,000 107,000 21,400 17,400 26,400 $ 69,600 $ 85,600 $ 105,600 Historically, cost of goods sold is about 50 percent of sales revenue. Selling and administrative expenses are about 10 percent of sales revenue. Fred Arvada, the chief executive officer, told Mr. Long that he expected sales next year to be 10 percent for each respective quarter above last year's level. However, Rita Banks, the vice president of sales, told Mr. Long that she believed sales growth would be only 5 percent. Required a. Prepare a pro forma income statement including quarterly budgets for the coming year using Mr. Arvada's estimate. b. Prepare…
Thornton, Inc. has budgeted sales for the months of September and October at S304,000.00 and $288,000.00, respectively. Monthly sales are 20% credit and 80% cash. Of the credit sales, 50% are collected in the month of sale, and 50% are collected in the following month. Calculate cash collections for the month of October. O A. $289,600.00 O B. $302.400.00 OC. $259,200.00 O D. $273,600.00
Hess Company has $15,000 in cash on hand on January 1 and has collected the following budget data: January February Sales $1,360,000 $640,000 Cash receipts from customers 851,850 871,300 Cash payments for merchandise inventory 561,700 532,416 Assume Hess has cash payments for selling and administrative expenses including salaries of $30,000 plus commissions of 11% of sales, all paid in the month of sale. The company requires a minimum cash balance of $12,500. Prepare a cash budget for January. Hess Company Cash Budget Two Months Ended January 31 and February 28 January Beginning cash balance Cash receipts Cash available Cash payments: Purchases of merchandise inventory Selling and administrative expenses Total cash payments Ending cash balance before financing Minimum cash balance desired Projected cash excess…

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