COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
4th Edition
ISBN: 9781260255157
Author: Haddock
Publisher: MCG CUSTOM
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Chapter 3, Problem 4DQ
To determine

Describe the importance of number gaps while creating COA.

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Information pertaining to Noskey Corporation’s sales revenue follows:                             November 20X1 (Actual)    December 20X1 (Budgeted)    January 20X2 (Budgeted)Cash sales                 $ 115,000                                $ 121,000                                $ 74,000Credit sales                 282,000                                    409,000                                 208,000Total sales                 $ 397,000                                  $ 530,000                              $ 282,000Management estimates 5% of credit sales to be uncollectible. Of collectible credit sales, 60% is collected in the month of sale and the remainder in the month following the month of sale. Purchases of inventory each month include 70% of the next month’s projected total sales (stated at cost) plus 30% of projected sales for the current month (stated at cost). All inventory purchases are on account; 25% is paid in the month of purchase, and the remainder is paid in…
Mirror Image Distribution Company expects its September sales to be 20% higher than its August sales of $163,000. Purchases were $113,000 in August and are expected to be $133,000 in September. All sales are on credit and are expected to be collected as follows: 40% in the month of the sale and 60% in the following month. Purchases are paid 20% in the month of purchase and 80% in the following month. The cash balance on September 1 is $23,000. The ending cash balance on September 30 is estimated to be:
Balance sheet information is useful for all of the following except:a) evaluating a company's financial flexibilityb) evaluating a company's liquidityc) assesing a company's riskd) determining free cash flows
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