Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
11th Edition
ISBN: 9780077861759
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Chapter 26, Problem 9QP
Calculating Cash Collections The following is the sales budget for Shleifer, Inc., for the first quarter of 2016:
Credit sales are collected as follows:
65 percent in the month of the sale.
20 percent in the month after the sale.
15 percent in the second month after the sale.
The accounts receivable balance at the end of the previous quarter was $ 122,800 ($87,750 of which were uncollected December sales).
- a. Compute the sales for November.
- b. Compute the sales for December.
- c. Compute the cash collections from sales for each month from January through March.
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Schedule of Cash Collections on Accounts Receivable and Cash BudgetBennett Inc. found that about 15% of its sales during the month were forcash. Bennett has the following accounts receivable collectionexperience:
Percent collected in the month of sale
Percent collected in the month after the sale
Percent collected in the second month after the sale
25
68
5
Bennett's anticipated sales for the next few months are as follows:
AprilMayJuneJulyAugust
$250,000290,000280,000295,000300,000
(Note: Round all amounts to the nearest dollar.)
Required:1. Calculate credit sales for May, June, July, and August.2. Prepare a schedule of cash receipts for July and August.
Prepare the Cash Collection Budget, Cash Payment Budget and a Final Adjusted Cash Budget using the below information for Pick Up Truck Company.
The company is expected to end the current year with $20,000 cash, $162,000 in accounts receivable, and $24,862 in accounts payable.
The company's sales are all made on credit, with 70% of the balance collected in the quarter of the sale and 30% in the quarter after the sale.
The company plans to sell a piece of land in the third quarter for $15,000, its book value.
The total cost of raw materials to be purchased (including tires) are: $31,270 in quarter one; $39,530 in quarter two; $60,936 in quarter three; and $69,021 in quarter four.
Raw materials purchases are paid for 60% in the quarter of the purchase and 40% in the quarter after the purchase.
All other cash expenses are paid for in the quarter they are incurred.
Capital expenditures for 20X1 include the purchase of machines for $20,000 in quarter two and $56,000 in quarter three.
Income…
Markham Company has completed its sales budget for the first quarter of Year 2. Projected credit sales for the first four months of the year are shown below:
January
$
32,000
February
$
38,000
March
$
47,000
April
$
50,000
The company's past records show collection of credit sales as follows: 32% in the month of sale and the balance in the following month. The total cash collection from receivables in March is expected to be:
Multiple Choice
$47,000.
$33,920.
$44,120.
$40,880.
Huang Company reported the following information for the current year:
Sales
$
860,000
Average operating assets
$
560,000
Margin
9
%
The company's return on investment was:
Multiple Choice
9.00%.
15.36%.
13.82%.
Cannot be ascertained from the information provided.
Chapter 26 Solutions
Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 26 - Prob. 1CQCh. 26 - Prob. 2CQCh. 26 - Prob. 3CQCh. 26 - Cost of Current Assets Grohl Manufacturing, Inc.,...Ch. 26 - Prob. 5CQCh. 26 - Shortage Costs What are the costs of shortages?...Ch. 26 - Prob. 7CQCh. 26 - Prob. 8CQCh. 26 - Prob. 9CQCh. 26 - Prob. 10CQ
Ch. 26 - Prob. 11CQCh. 26 - Prob. 12CQCh. 26 - Prob. 1QPCh. 26 - Cash Equation Blizzard Corp. has a book value of...Ch. 26 - Changes in the Operating Cycle Indicate the effect...Ch. 26 - Prob. 4QPCh. 26 - Calculating Cash Collections The Litzenberger...Ch. 26 - Prob. 6QPCh. 26 - Prob. 7QPCh. 26 - Calculating Payments The Thakor Corporations...Ch. 26 - Calculating Cash Collections The following is the...Ch. 26 - Prob. 10QPCh. 26 - Prob. 11QPCh. 26 - Prob. 12QPCh. 26 - Prob. 13QPCh. 26 - Prob. 14QPCh. 26 - Prob. 15QPCh. 26 - Prob. 1MCCh. 26 - Rework the cash budget and short-term financial...Ch. 26 - Rework the sales budget assuming an 11 percent...
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