Financial and Managerial Accounting (Looseleaf) (Custom Package)
6th Edition
ISBN: 9781259754883
Author: Wild
Publisher: MCG
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Question
Chapter 20, Problem 31E
(1)
To determine
To prepare: Cash receipt budget for the month of July, August and September.
(1)
Expert Solution
![Check Mark](/static/check-mark.png)
Explanation of Solution
Company K | ||||
Cash Receipt Budget | ||||
Particulars | July Amount ($) | August Amount ($) | September Amount ($) | |
Sales | 64,000 | 80,000 | 48,000 | |
Cash collection: | ||||
Previous sale (80% of previous sale) | 45,000 | 51,200 | 64,000 | |
Current sale (20% of current sale) | 12,800 | 16,000 | 9,600 | |
Total | 57,800 | 67,200 | 73,600 | |
Table (1) |
(2)
To determine
To prepare: Monthly
(2)
Expert Solution
![Check Mark](/static/check-mark.png)
Explanation of Solution
Company K | ||||
Cash Budget | ||||
Particulars | July Amount ($) | August Amount ($) | September Amount ($) | |
Beginning cash balance | 15,000 | 15,000 | 25,504 | |
Add: Cash receipts (From part 1) | 57,800 | 67,200 | 73,600 | |
Total cash available | 72,800 | 82,200 | 99,100 | |
Less: Cash disbursement (Working Note 1) | 57,300 | 52,100 | 49,700 | |
Interest expense (working note 2) | 50 | 46 | - | |
Preliminary cash balance | 15,450 | 30,054 | 49,404 | |
Less: Required ending cash balance | 15,000 | 15,000 | 15,000 | |
Surplus | 450 | 15,054 | 34,404 | |
Beginning balance of loan | 5,000 | 4,550 | 0 | |
Add: Additional loan from bank | 0 | 0 | 0 | |
Less: Repayment of loan | 450 | 4,550 | 0 | |
Ending loan balance | 4,550 | 0 | 0 | |
Ending cash balance to be carried forward next month | 15,000 | 25,504 | 49,404 | |
Table (2) |
Working Note 1:
Company K | ||||
Cash Disbursements | ||||
Particulars | July Amount ($) | August Amount ($) | September Amount ($) | |
Cash payments for merchandise | 40,400 | 33,600 | 34,400 | |
Sales commission | 6,400 | 8,000 | 4,800 | |
Salaries | 4,000 | 4,000 | 4,000 | |
Rent | 6,500 | 6,500 | 6,500 | |
Total | 57,300 | 52,100 | 49,700 | |
Table (3) |
Working Note 2:
Formula to calculate interest expense for the month,
For April,
Given,
Beginning balance of loan $5,000.
Substitute $5,000 for beginning balance.
For May,
Beginning balance of loan $4,550 (calculated).
Substitute $4,550 for beginning balance.
For June,
Beginning balance of loan $0 (calculated).
Substitute $0 for beginning balance.
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Chapter 20 Solutions
Financial and Managerial Accounting (Looseleaf) (Custom Package)
Ch. 20 - Prob. 1MCQCh. 20 - Prob. 2MCQCh. 20 - Prob. 3MCQCh. 20 - Prob. 4MCQCh. 20 - Prob. 5MCQCh. 20 - Identify at least three benefits of budgeting in...Ch. 20 - What two common benchmarks can be used to evaluate...Ch. 20 - What is the benefit of continuous budgeting?Ch. 20 - Identify three usual time horizons for short-term...Ch. 20 - Why should each department participate in...
Ch. 20 - How does budgeting help management coordinate and...Ch. 20 - Why is the sales budget so important to the...Ch. 20 - What is the selling expense budget? What is the...Ch. 20 - Budgeting promotes good decision making by...Ch. 20 - GOOGLE Google prepares a cash budget. What is a...Ch. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Prob. 14DQCh. 20 - Prob. 1QSCh. 20 - Prob. 2QSCh. 20 - Prob. 3QSCh. 20 - Prob. 4QSCh. 20 - Prob. 5QSCh. 20 - Prob. 6QSCh. 20 - Prob. 7QSCh. 20 - Prob. 8QSCh. 20 - Prob. 9QSCh. 20 - Prob. 10QSCh. 20 - Prob. 11QSCh. 20 - Prob. 12QSCh. 20 - Prob. 13QSCh. 20 - Prob. 14QSCh. 20 - Prob. 15QSCh. 20 - Manufacturing: Production budget P1 Atlantic Surf...Ch. 20 - Prob. 17QSCh. 20 - Prob. 18QSCh. 20 - Prob. 19QSCh. 20 - Cash receipts, with uncollectible accounts P2 The...Ch. 20 - Cash receipts, with uncollectible accounts P2 Well...Ch. 20 - Prob. 22QSCh. 20 - Prob. 23QSCh. 20 - Prob. 24QSCh. 20 - Prob. 25QSCh. 20 - Prob. 26QSCh. 20 - Prob. 27QSCh. 20 - Prob. 28QSCh. 20 - Prob. 29QSCh. 20 - Prob. 30QSCh. 20 - Prob. 31QSCh. 20 - Prob. 32QSCh. 20 - Prob. 1ECh. 20 - Prob. 2ECh. 20 - Prob. 3ECh. 20 - Prob. 4ECh. 20 - Exercise 20-5 Manufacturing: Direct labor budget...Ch. 20 - Prob. 6ECh. 20 - Prob. 7ECh. 20 - Prob. 8ECh. 20 - Prob. 9ECh. 20 - Prob. 10ECh. 20 - Prob. 11ECh. 20 - Prob. 12ECh. 20 - Prob. 13ECh. 20 - Prob. 14ECh. 20 - Prob. 15ECh. 20 - Prob. 16ECh. 20 - Prob. 17ECh. 20 - Prob. 18ECh. 20 - Prob. 19ECh. 20 - Prob. 20ECh. 20 - Prob. 21ECh. 20 - Prob. 22ECh. 20 - Prob. 23ECh. 20 - Prob. 24ECh. 20 - Prob. 25ECh. 20 - Prob. 26ECh. 20 - Prob. 27ECh. 20 - Prob. 28ECh. 20 - Prob. 29ECh. 20 - Prob. 30ECh. 20 - Prob. 31ECh. 20 - Prob. 32ECh. 20 - Prob. 33ECh. 20 - Prob. 34ECh. 20 - Prob. 1PSACh. 20 - Prob. 2PSACh. 20 - Prob. 3PSACh. 20 - Prob. 4PSACh. 20 - Prob. 5PSACh. 20 - Prob. 6PSACh. 20 - Prob. 7PSACh. 20 - Prob. 8PSACh. 20 - Prob. 1PSBCh. 20 - Prob. 2PSBCh. 20 - Prob. 3PSBCh. 20 - Prob. 4PSBCh. 20 - Prob. 5PSBCh. 20 - Prob. 6PSBCh. 20 - Prob. 7PSBCh. 20 - Prob. 8PSBCh. 20 - Prob. 20SPCh. 20 - Prob. 1BTNCh. 20 - Prob. 2BTNCh. 20 - ETHICS CHALLENGE C1 BTN 20-3 Both the budget...Ch. 20 - Prob. 4BTNCh. 20 - Prob. 5BTNCh. 20 - Prob. 6BTNCh. 20 - Prob. 7BTNCh. 20 - Prob. 8BTNCh. 20 - Prob. 9BTN
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