The management accountant of G-Force Merchandising is preparing the cash budget for thethird quarter of 2024.The following information was extracted from the sales and purchases budgetMonth2024CashSalesSalesOnCashPurchasesPurchasesOnAccountAccountMay$138,100$480,000$345,000June$156,500$600,000$25,800$380,000July$165,275$650,000$45,000$400,000August$118,440$700,000$30,400$480,000September$205,220$800,000$55,100$540,000Accounts receivable are settled according to the following credit pattern, in accordance withthe credit terms 3/30, n90.60% in the month of sale30% in the first month the sale10% in the second month following the saleWhat is the figure for Accounts Receivable to be reflected in the budgeted balance sheet atSeptember 30?a. $320,000b. $390,000○ c. $800,000O d. $740,000

The problem is asking us to calculate the Accounts Receivable to be reflected in the budgeted…

Answered: The management accountant of G-Force…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 4P

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CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2019 and 2020: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2019. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal, and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.
What is the amount of budgeted cash payments if purchases are budgeted for $420,000 and the beginning and ending balances of accounts payable are $95,000 and $92,000, respectively?
Selling and administrative expense budget and budgeted income statement Budgeted selling and administrative expenses for Scottsdale Styles Inc. in P7-4 for the year ended December 31, 2016, were as follows: Required: 1. Prepare a selling and administrative expenses budget, in good form, for the year 2016. 2. Using the information above and the budgets prepared in P7-4, prepare a budgeted income statement for the year 2016, assuming an income tax rate of 30%.
the task of preparing the cash budget for the business for the quarter ending September 30, 2022. Your data collection has yielded the following:i) Extracts from the sales and purchases budgets are as follows:Month CashSales SalesOn Account CashPurchases PurchasesOn AccountMay $75,000 $480,000 $390,000June $135,000 $600,000 $36,000 $360,000July $86,800 $720,000 $61,700 $450,000August $105,600 $640,000 $68,800 $400,000September $112,500 $800,000 $77,250 $500,000ii) An analysis of the records shows that trade receivables (accounts receivable)…
Odane Cranston, the management accountant at BG Merchandising & More, is in the process of planning the company’s cash needs for the last quarter of 2020. Extracts from the sales and purchases budgets are as follows:Month2020CashSalesSalesOn AccountPurchasesOnAccountAugustSeptemberOctoberNovemberDecember$85,000$75,500$69,870$80,030$63,010$520,000$640,000$760,000$680,000$850,000$420,000$400,000$520,000$440,000$540,000i) An analysis of the records shows that trade receivables (accounts receivable) are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90:60% in the month of sale 25% in the first month following the sale15% in the second month following the saleii) Accounts payable are settled as follows, in accordance with the credit terms 2/30, n60:80% in the month in which the inventory is purchased 20% in the following monthiii) In the month of November, the management of BG Merchandising expects to sell an old motor vehicle that cost…
The management accountant at L & P Merchandising & More, Michael Stona, is in theprocess of preparing the cash budget for the business for the quarter ending December31, 2020. Extracts from the sales and purchases budgets are as follows:Month2020CashSalesSalesOnAccountPurchasesOnAccountAugust $121,000 $480,000 $390,000September $95,500 $600,000 $360,000October $132,680 $720,000 $480,000November $105,900 $650,000 $400,000December $216,000 $800,000 $500,000(i) An analysis of the records shows that trade receivables (accounts receivable) aresettled according to the following credit pattern, in accordance with the creditterms 5/30, n90:60% in the month of sale30% in the first month following the sale10% in the second month following the sale(ii) Accounts payable are settled as follows, in accordance with the credit terms 3/30,n60:80% in the month in which the inventory is purchased20% in the following month(iii) During November, the management of L & P Merchandising expects to…
ONLY ANSWER QUESTION (B) the task of preparing the cash budget for the business for the quarter ending September 30, 2022. Your data collection has yielded the following:i) Extracts from the sales and purchases budgets are as follows:Month CashSales SalesOn Account CashPurchases PurchasesOn AccountMay $75,000 $480,000 $390,000June $135,000 $600,000 $36,000 $360,000July $86,800 $720,000 $61,700 $450,000August $105,600 $640,000 $68,800 $400,000September $112,500 $800,000 $77,250 $500,000ii) An analysis of the records shows that trade…
Your data collection has yielded the following: (i) Extracts from the sales and purchases budgets are as follows: Month November 2023 - March 2024 Cash Sales Sales on Account Purchases November $151,000 $480,000 $375,000 December $145,500 $600,000 $360,000 January $159,025 $700,000 $508,000 February $169,350 $650,000 $400,000 March $176,200 $800,000 $521,000 An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 2/30, n90:45% in the month of sale30% in the first month following the sale.25% in the second month following the sale. (iii) Expected purchases include cash purchases of $28,000 in January and $21, 000 in March.All other purchases are on account. Accounts payable are settled as follows, in accordancewith the credit terms 4/30, n60:75% in the month in which the inventory is purchased.25% in the following month (iv) The management of Toyota &…
The management accountant at L&P Merchandising & More, Michael Stona, is in the process of preparing the cash budget for the business for the quarter ending December 31, 2020. Extracts from the sales and purchases budgets are as follows: Month Cash Sales Purchases 2020 Sales On On Account Account August $121,000 $480,000 $390,000 September $95,500 $600,000 $360,000 October $132,680 $720,000 $480.000 November $105,900 $650,000 $400,000 December $216,000 $800,000 $500,000 An analysis of the records shows that trade receivables (accounts receivable) are settled according to the following credit pattern, in accordance with the credit terms 5/30, 790: 60% in the month of sale 30% in the first month following the sale 10% in the second month following the sale Accounts payable are settled as follows, in accordance with the credit terms 3/30. n60: 80% in the month in which the inventory is purchased 20% in the following month (ii) During November, the management of L&P…
Using a separate columnar worksheet or Excel worksheet, prepare a Cash Budget by month for the quarter ending September 30, 2021, from the following data obtained from the CONSCIOÜNESS Company. Support your solution with schedules of estimated receipts and payments. August P 16,000 150,000 July September Cash Sales P 12,000 P 18,000 Credit Sales Purchases 110,000 120,000 90,000 120,000 110,000 Operating expenses Interest expense 15,000 18,000 16,000 2,000 Credit sales are collected 50% in the month of sales, 40% on the month following, 8% in the second month following and 2% uncollectible. Credit sales for May and June are expected to be P100,000 and P90,000, respectively. Purchases of merchandise, all on account, are paid 60% in the month of purchase and 40% in the month following. Purchases for June are estimated at P80,000. Expenses include depreciation of P2,000 monthly, and are paid in the month incurred. Cash balance on June 30, 2021.
Can you please help with the last part of the question. Odane Cranston, the management accountant at BG Merchandising & More, is in the process of planning the company’s cash needs for the last quarter of 2020. Extracts from the sales and purchases budgets are as follows:Month2020CashSalesSalesOn AccountPurchasesOnAccountAugustSeptemberOctoberNovemberDecember$85,000$75,500$69,870$80,030$63,010$520,000$640,000$760,000$680,000$850,000$420,000$400,000$520,000$440,000$540,000i) An analysis of the records shows that trade receivables (accounts receivable) are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90:60% in the month of sale 25% in the first month following the sale15% in the second month following the saleii) Accounts payable are settled as follows, in accordance with the credit terms 2/30, n60:80% in the month in which the inventory is purchased 20% in the following monthiii) In the month of November, the management of BG…
Bolden Company prepared the following budgeted income statement for 2025: 1(Click the icon to view the budgeted income statement.) Read the requirements2. Requirement 1. Prepare a budgeted income statement with columns for 1,300 units, 1,400 units, and 1,900 units sold. Bolden Company Budgeted Income Statement For the Year Ended December 31, 2025 Unit sales 1,300 Sales Revenue Cost of Goods Sold Gross Profit Selling and Administrative Expenses Operating Income 1,400 1,900 Requirement 2. How might managers use this type of budgeted income statement? The budgeted income statement prepared in Requirement 1 is a (1) budget. It allows Bolden's managers to plan for (2) sales level(s). Requirement 3. How might spreadsheet software such as Excel assist in this type of…

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