ADM 2341 Lecture 9: CAPSTONE 9

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harlequinbear906

18 Apr 2017

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Pokemon house has budgeted sales revenues as follows: Past experience indicates that 70% of the credit sales will be collected in the month of sale and the remaining 30% will be collected in the following month. Purchases of inventory are all on credit and 60% is paid in the month of purchase and 40% in the month following purchase. Other cash disbursements budgeted: selling and administrative expenses of ,000 each month, dividends of ,000 will be paid in july, and purchase of a computer in august for ,000 cash. The company wishes to maintain a minimum cash balance of ,000 at the end of each month. The company borrows money from the bank at 9% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on july 1 was ,000. All amounts borrowed during a month are borrowed on the first day.

Related Questions

Federated Department Stores has budgeted sales revenues asfollows:

Creditsales July $250,000

August 190,000

September150,000

October 140,000

In the past, 75% of the credit saleswere collected in the month of sale, 20% were collected in thefirst month following the sale and 5% in the second month followingthe sale. Purchases of inventory are all on credit and 28% is paidin the month of purchase and 72% in the month following purchase.Budgeted inventory purchases are:

July $200,000

August 100,000

September 125,000

October 150,000

Other cash disbursements budgeted: (a)selling and administrative

expenses of $20,000 each month, (b)dividends of $50,000 will be

paid in September, and (c) purchase ofa van in October for $45,000

cash.

The company wishes to maintain aminimum cash balance of $50,000 at

the end of each month. Borrowed moneyis repaid in months when there is an

excess cash balance. The beginning cashbalance on September 1 was $50,000.

If money is borrowed, ignore interest

INSTRUCTIONS

(a) Prepare separate schedules for (1)expected collections from customers

and (2)expectedpayments for purchases of inventory. SHOW ALL

CALCULATIONS.

(b) Prepare a cash budget for themonths of September and October.

SHOW ALL WORK

plumgnu195

Cash Budget The Peoria Supply Company sells for $30 one productthat it purchases for $20. Budgeted sales in total dollars for nextyear are $720,000. The sales information needed for preparing theJuly budget follows: Month Sales Revenue May $30,000 June 43,000July 48,000 August 50,000 Account balances at July 1 include these:Cash $20,000 Merchandise inventory 17,000 Accounts receivable(sales) 22,000 Accounts payable (purchases) 14,000 The company paysfor one-half of its purchases in the month of purchase and theremainder in the following month. End-of-month inventory must be 50percent of the budgeted sales in units for the next month. A 2percent cash discount on sales is allowed if payment is made duringthe month of sale. Experience indicates that 50 percent of thebillings will be collected during the month of sale, 40 percent inthe following month, 7 percent in the second following month, and 3percent will be uncollectible. Total budgeted selling andadministrative expenses (excluding bad debts) for the fiscal yearare estimated at $192,000 , of which one-half is fixed expense(inclusive of a $20,000 annual depreciation charge). Fixed expensesare incurred evenly during the year. The other selling andadministrative expenses vary with sales. Expenses are paid duringthe month incurred. (Round your answers to the nearest wholenumber.) (a) Prepare a schedule of estimated cash collections forJuly. Peoria Supply Company Schedule of Cash Collections For theMonth of July Current month's sales $Answer Previous month's sales$Answer Two months' prior sales $Answer Total cash collections$Answer (b) Prepare a schedule of estimated July cash payments forpurchases. Peoria Supply Company Schedule of Cash Payments forPurchases For the Month of July Current month's purchases $AnswerBeginning accounts payable Answer Total cash payments $Answer (c)Prepare schedules of July selling and administrative expenses,separately identifying those requiring cash disbursements. PeoriaSupply Company Schedule of Selling and Administrative Expenses andCash Disbursements For the Month of July Total Cash Selling andadministrative expenses: Fixed $Answer Cash payment $AnswerVariable Answer Answer Total expenses and cash disbursements$Answer $Answer (d) Prepare a cash budget in summary form for July.Peoria Supply Company Cash Budget For the Month of July Cashreceipts $Answer Cash disbursements: Merchandise $Answer Sellingand administrative Answer Answer Excess receipts (disbursements)$Answer

indigoswan512

Information pertaining to Noskey Corporationâs sales revenue follows:

	November 2015 (actual)	December 2015 (actual)	January 2016 (actual)
Cash Sales	$80,000	$100,000	$60,000
Credit Sales	$240,000	$360,000	$180,000
Total Sales	$320,000	$460,000	$240,000

Management 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 monthâs 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 the month following the month of purchase. Purchase costs are approximately 60% of the selling price.

Determine for Noskey and explain the math:

1. Budgeted cash collections in December 2015 from November 2015 credit sales.

2. Budgeted total cash receipts in January 2016.

3. Budgeted total cash payments in December 2015 for inventory purchases.

ADM 2341 Lecture 9: CAPSTONE 9

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