Cash budget for December 2014 and January 2015 as well as supporting schedule for collections of receivable, payments for merchandise, marketing, distribution, and customer service costs. Given information: Opening balance of cash as on 01 December is $30,000. Opening balance of inventory is $111,800. Opening balance of account payable is $139,000. Company offer 3% discount if payment is made within 10 days. 50% of bill is collected within discount period. 30% by the end after purchases, Balance 15%in the following month. Average selling and purchase price of the product is $170 per unit and $130 per unit. 60% Purchases in a month are paid that month and remaining in the next following month. Total budgeted marketing, distribution and customer service costs for the year are $670,000 of this $155,000 is considered fixed cost including depreciation of $43,400.

Question

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Answer 1

Question

Chapter 6, Problem 6.39P

1.

To determine

To prepare: Cash budget for December 2014 and January 2015 as well as supporting schedule for collections of receivable, payments for merchandise, marketing, distribution, and customer service costs.

Given information:

Opening balance of cash as on 01 December is $30,000.

Opening balance of inventory is $111,800.

Opening balance of account payable is $139,000.

Company offer 3% discount if payment is made within 10 days.

50% of bill is collected within discount period.

30% by the end after purchases,

Balance 15%in the following month.

Average selling and purchase price of the product is $170 per unit and $130 per unit.

60% Purchases in a month are paid that month and remaining in the next following month.

Total budgeted marketing, distribution and customer service costs for the year are $670,000 of this $155,000 is considered fixed cost including depreciation of $43,400.

2.

To determine

To explain: The reason for preparation of cash budget along with operating income budget.

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Answer 2

Question

Chapter 6, Problem 6.39P

1.

To determine

To prepare: Cash budget for December 2014 and January 2015 as well as supporting schedule for collections of receivable, payments for merchandise, marketing, distribution, and customer service costs.

Given information:

Opening balance of cash as on 01 December is $30,000.

Opening balance of inventory is $111,800.

Opening balance of account payable is $139,000.

Company offer 3% discount if payment is made within 10 days.

50% of bill is collected within discount period.

30% by the end after purchases,

Balance 15%in the following month.

Average selling and purchase price of the product is $170 per unit and $130 per unit.

60% Purchases in a month are paid that month and remaining in the next following month.

Total budgeted marketing, distribution and customer service costs for the year are $670,000 of this $155,000 is considered fixed cost including depreciation of $43,400.

2.

To determine

To explain: The reason for preparation of cash budget along with operating income budget.

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Answer 3

Question

Chapter 6, Problem 6.39P

1.

To determine

To prepare: Cash budget for December 2014 and January 2015 as well as supporting schedule for collections of receivable, payments for merchandise, marketing, distribution, and customer service costs.

Given information:

Opening balance of cash as on 01 December is $30,000.

Opening balance of inventory is $111,800.

Opening balance of account payable is $139,000.

Company offer 3% discount if payment is made within 10 days.

50% of bill is collected within discount period.

30% by the end after purchases,

Balance 15%in the following month.

Average selling and purchase price of the product is $170 per unit and $130 per unit.

60% Purchases in a month are paid that month and remaining in the next following month.

Total budgeted marketing, distribution and customer service costs for the year are $670,000 of this $155,000 is considered fixed cost including depreciation of $43,400.

2.

To determine

To explain: The reason for preparation of cash budget along with operating income budget.

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Answer 4

Question

Chapter 6, Problem 6.39P

1.

To determine

To prepare: Cash budget for December 2014 and January 2015 as well as supporting schedule for collections of receivable, payments for merchandise, marketing, distribution, and customer service costs.

Given information:

Opening balance of cash as on 01 December is $30,000.

Opening balance of inventory is $111,800.

Opening balance of account payable is $139,000.

Company offer 3% discount if payment is made within 10 days.

50% of bill is collected within discount period.

30% by the end after purchases,

Balance 15%in the following month.

Average selling and purchase price of the product is $170 per unit and $130 per unit.

60% Purchases in a month are paid that month and remaining in the next following month.

Total budgeted marketing, distribution and customer service costs for the year are $670,000 of this $155,000 is considered fixed cost including depreciation of $43,400.

2.

To determine

To explain: The reason for preparation of cash budget along with operating income budget.

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Answer 5

Chapter 6, Problem 6.39P

1.

To determine

To prepare: Cash budget for December 2014 and January 2015 as well as supporting schedule for collections of receivable, payments for merchandise, marketing, distribution, and customer service costs.

Given information:

Opening balance of cash as on 01 December is $30,000.

Opening balance of inventory is $111,800.

Opening balance of account payable is $139,000.

Company offer 3% discount if payment is made within 10 days.

50% of bill is collected within discount period.

30% by the end after purchases,

Balance 15%in the following month.

Average selling and purchase price of the product is $170 per unit and $130 per unit.

60% Purchases in a month are paid that month and remaining in the next following month.

Total budgeted marketing, distribution and customer service costs for the year are $670,000 of this $155,000 is considered fixed cost including depreciation of $43,400.

2.

To determine

To explain: The reason for preparation of cash budget along with operating income budget.

Answer 6

Chapter 6, Problem 6.39P

1.

To determine

To prepare: Cash budget for December 2014 and January 2015 as well as supporting schedule for collections of receivable, payments for merchandise, marketing, distribution, and customer service costs.

Given information:

Opening balance of cash as on 01 December is $30,000.

Opening balance of inventory is $111,800.

Opening balance of account payable is $139,000.

Company offer 3% discount if payment is made within 10 days.

50% of bill is collected within discount period.

30% by the end after purchases,

Balance 15%in the following month.

Average selling and purchase price of the product is $170 per unit and $130 per unit.

60% Purchases in a month are paid that month and remaining in the next following month.

Total budgeted marketing, distribution and customer service costs for the year are $670,000 of this $155,000 is considered fixed cost including depreciation of $43,400.

Answer 7

Chapter 6, Problem 6.39P

1.

To determine

To prepare: Cash budget for December 2014 and January 2015 as well as supporting schedule for collections of receivable, payments for merchandise, marketing, distribution, and customer service costs.

Given information:

Opening balance of cash as on 01 December is $30,000.

Opening balance of inventory is $111,800.

Opening balance of account payable is $139,000.

Company offer 3% discount if payment is made within 10 days.

50% of bill is collected within discount period.

30% by the end after purchases,

Balance 15%in the following month.

Average selling and purchase price of the product is $170 per unit and $130 per unit.

60% Purchases in a month are paid that month and remaining in the next following month.

Total budgeted marketing, distribution and customer service costs for the year are $670,000 of this $155,000 is considered fixed cost including depreciation of $43,400.

Answer 8

2.

To determine

To explain: The reason for preparation of cash budget along with operating income budget.

Answer 9

2.

To determine

To explain: The reason for preparation of cash budget along with operating income budget.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 6 - What are the four elements of the budgeting cycle?Ch. 6 - Define master budget.Ch. 6 - Strategy, plans, and budgets are unrelated to ore...Ch. 6 - Budgeted performance is a better criterion than...Ch. 6 - Production managers and marketing managers are...Ch. 6 - Budgets meet the cost-benefit test. They force...Ch. 6 - Define rolling budget. Give an example.Ch. 6 - Outline the steps in preparing an operating...Ch. 6 - The sales forecast is the cornerstone for...Ch. 6 - Prob. 6.10Q

To explain: The reason for preparation of cash budget along with operating income budget.

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