Tilson Corporation has projected sales and production in units for the second quarter of the coming year as follows: Sales Production April 53,000 63,000 May 43,000 53,000 June 63,000 53,000 Cash-related production costs are budgeted at $5 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $50,000 per month. The accounts payable balance on March 31 totals $182,000, which will be paid in April. All units are sold on account for $11 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totaled $674,000 ($114,000 from February's sales and $560,000 from March's sales). Required A Required B Required: a. Prepare a schedule for each month showing budgeted cash disbursements for Tilson Corporation. b. Prepare a schedule for each month showing budgeted cash receipts for Tilson Corporation. Complete this question by entering your answers in the tabs below. Prepare a schedule for each month showing budgeted cash disbursements for Tilson Corporation.
Tilson Corporation has projected sales and production in units for the second quarter of the coming year as follows: Sales Production April 53,000 63,000 May 43,000 53,000 June 63,000 53,000 Cash-related production costs are budgeted at $5 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $50,000 per month. The accounts payable balance on March 31 totals $182,000, which will be paid in April. All units are sold on account for $11 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totaled $674,000 ($114,000 from February's sales and $560,000 from March's sales). Required A Required B Required: a. Prepare a schedule for each month showing budgeted cash disbursements for Tilson Corporation. b. Prepare a schedule for each month showing budgeted cash receipts for Tilson Corporation. Complete this question by entering your answers in the tabs below. Prepare a schedule for each month showing budgeted cash disbursements for Tilson Corporation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
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Tilson Corporation has projected sales and production in units for the second quarter of the coming year as
follows:
Sales
Production
April
53,000
63,000
Cash-related production costs are budgeted at $5 per unit produced. Of these production costs, 40% are paid
in the month in which they are incurred and the balance in the following month. Selling and administrative
expenses will amount to $50,000 per month. The accounts payable balance on March 31 totals $182,000,
which will be paid in April.
2
All units are sold on account for $11 each. Cash collections from sales are budgeted at 60% in the month of
sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the
month of sale. Accounts receivable on April 1 totaled $674,000 ($114,000 from February's sales and $560,000
from March's sales).
Required A Required B
Production cost
Cash disbursement:
Required:
a. Prepare a schedule for each month showing budgeted cash disbursements for Tilson Corporation.
b. Prepare a schedule for each month showing budgeted cash receipts for Tilson Corporation.
Complete this question by entering your answers in the tabs below.
Total disbursements
Production costs this month (40%)
Production costs prior month (60.0%)
Selling and administrative
May
43,000
53,000
Prepare a schedule for each month showing budgeted cash disbursements for Tilson Corporation.
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