The Overland Company is preparing its cash budget for the month of June. The following information is available concerning its accounts receivable: $304,000 229,000 Estimated credit sales for June Actual credit sales for May Estimated collections in June for credit sales in June Estimated collections in June for credit sales in May Estimated collections in June for credit sales prior to May Estimated write-offs in June for uncollectible credit sales 25% 65% $ 22,000 16,000 14,000 Estimated provision for bad debts in June for credit sales in June

The Overland Company is preparing its cash budget for the month of June. The following information is available concerning its accounts receivable: $304,000 229,000 Estimated credit sales for June Actual credit sales for May Estimated collections in June for credit sales in June Estimated collections in June for credit sales in May Estimated collections in June for credit sales prior to May Estimated write-offs in June for uncollectible credit sales 25% 65% $ 22,000 16,000 14,000 Estimated provision for bad debts in June for credit sales in June

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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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:
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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
Jasper Company has 62% of its sales on credit and 38% for cash. All credit sales are collected in full in the first month following the sale. The company budgets sales of $522,000 for April, $532,000 for May, and $557,000 for June. Total sales for March are $304,900. Prepare a schedule of cash receipts from sales for April, May, and June. Sales Cash receipts from: Accounts receivable Total cash receipts JASPER COMPANY Schedule of Cash Receipts from Sales April 522,000 May 532,000 June 557,000
A company has 30% of its sales for cash and 70% of its sales on credit. All credit sales are fully collected in the first month after the sale. Budgeted sales are $60,200 for January, $84,200 for February, and $108,200 for March. December sales were $50,200. Prepare a schedule of cash receipts from sales for January, February, and March. Sales Cash receipts from: Cash sales Collections of prior period sales. Total cash receipts $ 60,200 $ February 84,200 $ 108,200
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…
What are the estimated cash disbursements for inventories in April?
Cloudy Company had the following historical collection pattern for its credit sales: 70% collected in the month of sale 12% collected in the first month after month of sale 10% collected in the second month after month of sale 5% collected in the third month after month of sale 3% uncollectible The sales on open account (credit sales) have been budgeted for the last six months of the year as shown below: July August September October November December The estimated cash collection by Cloudy Company during September from credit sales in July, August, and September is: Multiple Choice $83,840. $100,160. $90,880. $ 92,000 $ 104,000 $ 116,000 $ 128,000 $ 140,000 $ 122,000 $64,400.
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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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