Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 8, Problem 1E
Schedule of Expected Cash Collections LOB-2
Silver Company makes a product that is very popular as a Mother’s Day gift Thus, peak sales occur in May of each year, as shown in the company’s salesbudget for the second quarter given below:
From past experience, the company has learned that 20% of a month’s sales are collected in the month of sale, another? 70% are collected in the monthfollowing sale, and the remaining 10% are collected in the second month following sale.
$230,000, and March sales totaled $260,000.
Required:
1. Using Schedule 1 as your guide, prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
2. What is the
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Schedule of Expected Cash Collections
Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below:
From past experience, the company has learned that 20% of a month’s sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.
Required:
1. Using Schedule 1 as your guide, prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
2. What is the accounts receivable balance on June 30th?
Schedule of expected cash collections
Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak
sales occur in May of each year. These peak sales are shown in the company's sales
budget for the second quarter given below:
April
$300,000
May
June
Total
eted Sales
$500,000
$200,000
$1,000,000
From past experience, the company has learned that 15% of the company's sales are for
cash. Credit sales are collected as follows: 20% are collected in the month of sale,
another 70% are collected in the month following the sale, and the remaining 10% are
collected in the second month following the sale. Bad debts are negligible and can be
ignored. February sales totaled $230,000, and March sales totaled $260,000.
A. Prepare a schedule of expected cash collections from sales, by month and in total,
for the second quarter.
B. Assume that the company will prepare a budgeted balance sheet as of June 30.
Compute the accounts receivable as of that date.
Problem 1. Jane McDonald, a financial analyst for Carroll Company, has prepared the following sales and cash
disbursement estimates for the period February to June of the current year.
Cash
disbursements
Month
Sales
February
$500
$400
March
600
300
April
400
600
May
200
500
June
200
200
McDonald notes that historically, 30% of sales have been for cash. Of credit sales, 70% are collected 1 month after the
sale, and the remaining 30% are collected 2 months after the sale. The firm wishes to maintain a minimum ending
balance in its cash account of $25. Balances above this amount would be invested in short-term government securities
(marketable securities), whereas any deficits would be financed through short-term bank borrowing (notes payable).
The beginning cash balance at April 1 is $115.
a. Prepare cash budgets for April, May, and June.
b.
How much financing, if any, at a maximum would Carroll Company require to meet its obligations during this
3-month period?
c. A pro forma balance…
Chapter 8 Solutions
Introduction To Managerial Accounting
Ch. 8 - What is a budget? What is budgetary control?Ch. 8 - Prob. 2QCh. 8 - What is meant by the term responsibility...Ch. 8 - What is a master budget? Briefly describe its...Ch. 8 - Why is the sales forecast the starting point in...Ch. 8 - “As a practical matter, planning and control mean...Ch. 8 - Prob. 7QCh. 8 - What is a self-imposed budget? What are the major...Ch. 8 - How can budgeting assist a company in planning its...Ch. 8 - Prob. 10Q
Ch. 8 - The Excel worksheet form that appears below is to...Ch. 8 - The Excel worksheet form that appears below is to...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Prob. 2F15Ch. 8 - Prob. 3F15Ch. 8 - Prob. 4F15Ch. 8 - Morganton Company makes one product and it...Ch. 8 - Prob. 6F15Ch. 8 - Prob. 7F15Ch. 8 - Prob. 8F15Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Prob. 11F15Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Schedule of Expected Cash Collections LOB-2 Silver...Ch. 8 - Down Under Products, Ltd., of Australia has...Ch. 8 - Direct Materials Budget LOB-4 Three grams of musk...Ch. 8 - Direct Labor Budget LOB-5 The production manager...Ch. 8 - Manufacturing Overhead Budget L.08—6 The direct...Ch. 8 - Weller Company’s budgeted unit sales for the...Ch. 8 - Cash Budget LOB—8 Garden Depot is a retailer that...Ch. 8 - Gig Harbor is the wholesale distributor of a small...Ch. 8 - The management of Mecca copy, a photocopying...Ch. 8 - Production and Direct Materials Budgets LO8—,...Ch. 8 - Cash Budget Analysis LOB—8 A cash budget, by...Ch. 8 - Prob. 12ECh. 8 - Schedules of Expected Cash Collections and...Ch. 8 - Sales and Production Budgets L08—2, L08—3 The...Ch. 8 - Direct Labor and Manufacturing Overhead Budgets...Ch. 8 - Direct Materials and Direct Labor Budgets LOB—4,...Ch. 8 - Cash Flows; Budgeted Income Statement and Balance...Ch. 8 - Cash Flows; Budgeted Income Statement and Balance...Ch. 8 - Cash Budget: Income Statement: Balance Sheet...Ch. 8 - Cash Budget; Income Statement: Balance Sheet;...Ch. 8 - Schedules of Expected Cash Collections and...Ch. 8 - Evaluating a Company’s Budget Procedures LOB—1...Ch. 8 - Prob. 23PCh. 8 - Cash Budget with Supporting Schedules L08-2,...Ch. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Completing a Master Budget LOB—2, LO8—4, LO8—7,...Ch. 8 - Prob. 30PCh. 8 - Completing a Master Budget LOB-2, LOB-4, LOB-7,...
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- Cash collections for Wax On Candles found that 60% of sales were collected in the month of the sale, 30% was collected the month after the sale, and 10% was collected the second month after the sale. Given the sales shown, how much cash will be collected in January and February?arrow_forwardHalifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is collected in the month of sale, 25% is collected the month after the sale, and 5% is collected the second month after the sale. How much cash will be collected in August if sales are estimated as $75,000 in June, $65,000 in July, and $90,000 in August?arrow_forwardEarthies Shoes has 55% of its sales in cash and the remainder on credit. Of the credit sales, 70% is collected in the month of sale, 15% is collected the month after the sale, and 10% is collected the second month after the sale. How much cash will be collected in June if sales are estimated as $75,000 in April, $65,000 in May, and $90,000 in June?arrow_forward
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