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2. A Sendai clothing wholesaler was preparing its sales budgetfor the first quarter of 20X8. Forecast sales are as follows (Allvalues are in thousands of yen).
January
Â¥203,000
February
Â¥227,000
March
Â¥248,000
a) Sales are 40% cash and 60% on credit. Fifty-five percent ofthe credit accounts are collected in the month of sale, 35% in themonth following the sale, and 10% in the following month. Nouncollectible accounts are anticipated. Accounts receivable at thebeginning of 20X8 are ¥82,950 (10% of November credit sales of¥150,000 and 45% of December credit sales of ¥151,000).
b) Prepare a schedule showing sales and cash collections forJanuary, February, and March, 20X8.
hello
This is third time am posting this question none of them gave meproper solutions for A & B.
while posting please mention A & B . and give a properexplanation so that even I could understand thank you .
home / study / business / accounting / questions and answers /2. a sendai clothing wholesaler was preparing its ...
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Let us know if you got a helpful answer.
Question: 2. A Sendai clothing wholesaler was preparing its...
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2. A Sendai clothing wholesaler was preparing its sales budgetfor the first quarter of 20X8. Forecast sales are as follows (Allvalues are in thousands of yen).
January | ¥203,000 |
February | ¥227,000 |
March | ¥248,000 |
a) Sales are 40% cash and 60% on credit. Fifty-five percent ofthe credit accounts are collected in the month of sale, 35% in themonth following the sale, and 10% in the following month. Nouncollectible accounts are anticipated. Accounts receivable at thebeginning of 20X8 are ¥82,950 (10% of November credit sales of¥150,000 and 45% of December credit sales of ¥151,000).
b) Prepare a schedule showing sales and cash collections forJanuary, February, and March, 20X8.
hello
This is third time am posting this question none of them gave meproper solutions for A & B.
while posting please mention A & B . and give a properexplanation so that even I could understand thank you .
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2. A Sendai clothing wholesaler was preparing its sales budgetfor the first quarter of 20X8. Forecast sales are as follows (Allvalues are in thousands of yen).
January | ¥203,000 |
February | ¥227,000 |
March | ¥248,000 |
a) Sales are 40% cash and 60% on credit. Fifty-five percent ofthe credit accounts are collected in the month of sale, 35% in themonth following the sale, and 10% in the following month. Nouncollectible accounts are anticipated. Accounts receivable at thebeginning of 20X8 are ¥82,950 (10% of November credit sales of¥150,000 and 45% of December credit sales of ¥151,000).
b) Prepare a schedule showing sales and cash collections forJanuary, February, and March, 20X8.
Hancock Company, a merchandisingcompany, prepares its master budget on a quarterly basis. Thefollowing data have been assembled to assist in preparation of themaster budget for the second quarter.
a. As of December 31(the end of the prior quarter), the companyâs balance sheet showedthe following account balances:
Cash | $ 6,700 | |||
Accounts receivable | 36,900 | |||
Inventory | 11,130 | |||
Buildings and equipment (net) | 120,000 | |||
Accounts payable | $ 32,880 | |||
Common stock | 100,000 | |||
Retained earnings |
| 41,850 | ||
$174,730 | $174,730 | |||
b. Actual andbudgeted sales are as follows:
December (actual) | $61,500 |
January | $79,500 |
February | $88,800 |
March | $89,400 |
April | $58,100 |
c. Sales are 40% forcash and 60% on credit. All payments on credit sales are collectedin the month following the sale. The accounts receivable atDecember 31 are a result of December credit sales.
d. The companyâs grossmargin percentage is 30% of sales. (In other words, cost of goodssold is 70% of sales.)
e. Each monthâs endinginventory should equal 20% of the following month's budgeted costof goods sold.
f. One-quarter of a monthâsinventory purchases is paid for in the month of purchase; the otherthree-quarters are paid for in the following month. The accountspayable at December 31 are the result of December purchases ofinventory.
g. Monthly expenses areas follows: commissions, $12,150; rent, $2,650; other expenses(excluding depreciation), 8% of sales. Assume that these expensesare paid monthly. Depreciation is $2,550 for the quarter andincludes depreciation on new assets acquired during thequarter.
h. Equipment will beacquired for cash: $3,830 in January and $8,100 in February.
i. Management would like to maintaina minimum cash balance of $5,000 at the end of each month. Thecompany has an agreement with a local bank that allows the companyto borrow in increments of $1,000 at the beginning of each month,up to a total loan balance of $50,000. The interest rate on theseloans is 1% per month, and for simplicity, we will assume thatinterest is not compounded. The company would, as far as it isable, repay the loan plus accumulated interest at the end of thequarter.
Required:
Using the data above, complete thefollowing statements and schedules for the second quarter:
1. Schedule of expected cashcollections:
January | February | March | Total | |||
Cash sales | $31,800.00 | |||||
Credit sales | 36,900.00 |
|
|
| ||
Total collections | $68,700.00 |
|
|
| ||
2. a. Merchandise purchasesbudget:
January | February | March | Total | |||
Budgeted cost of goods | $55,650.00 | * | $62,160.00 | |||
Add desired ending inventory | 12,432.00 | â | ||||
Total needs | 68,082.00 | |||||
Less beginning inventory | 11,130.00 |
|
|
| ||
Required purchases | $56,952.00 |
|
|
| ||
*$79,500.00 sales à 70% =$55,650.00. | ||||||
â $88,800.00 Ã 70% Ã 20% =$12,432.00. |
b. Schedule of expected cashdisbursements for merchandise purchases:
January | February | March | Total | ||
December purchases | $32,880.00 | * | $32,880.00 | ||
January purchases | 14,238.00 | $42,714.00 | 56,952.00 | ||
February purchases | 0.00 | ||||
March purchases | 0.00 |
|
|
| |
Total cash disbursements forpurchases | $47,118.00 |
|
|
| |
*Beginning balance of the accountspayable. |
3. Schedule of expected cashdisbursements for selling and administrative expenses:
January | February | March | Total | |
Commissions | $12,150.00 | |||
Rent | 2,650.00 | |||
Other expenses | 6,360.00 |
|
|
|
Total cash disbursements forselling | $21,160.00 |
|
|
|
4. Cash budget:
January | February | March | Total | |
Cash balance, beginning | $ 6,700.00 | |||
Add cash collections | 68,700.00 |
|
|
|
Total cash available | 75,400.00 |
|
|
|
Less cash disbursements: | ||||
For inventory | 47,118.00 | |||
For operating expenses | 21,160.00 | |||
For equipment | 3,830.00 |
|
|
|
Total cash disbursements | 72,108.00 |
|
|
|
Excess (deficiency) of cash | 3,292.00 | |||
Financing | ||||
Etc. |
5. Prepare an incomestatement for the quarter ending March 31 as shown in Chapter7.
6. Prepare a balancesheet as of March 31.
Hancock Company, a merchandisingcompany, prepares its master budget on a quarterly basis. Thefollowing data have been assembled to assist in preparation of themaster budget for the second quarter.
a. As of December 31(the end of the prior quarter), the companyâs balance sheet showedthe following account balances:
Cash | $ 6,700 | |||
Accounts receivable | 36,900 | |||
Inventory | 11,130 | |||
Buildings and equipment (net) | 120,000 | |||
Accounts payable | $ 32,880 | |||
Common stock | 100,000 | |||
Retained earnings |
| 41,850 | ||
$174,730 | $174,730 | |||
b. Actual andbudgeted sales are as follows:
December (actual) | $61,500 |
January | $79,500 |
February | $88,800 |
March | $89,400 |
April | $58,100 |
c. Sales are 40% forcash and 60% on credit. All payments on credit sales are collectedin the month following the sale. The accounts receivable atDecember 31 are a result of December credit sales.
d. The companyâs grossmargin percentage is 30% of sales. (In other words, cost of goodssold is 70% of sales.)
e. Each monthâs endinginventory should equal 20% of the following month's budgeted costof goods sold.
f. One-quarter of a monthâsinventory purchases is paid for in the month of purchase; the otherthree-quarters are paid for in the following month. The accountspayable at December 31 are the result of December purchases ofinventory.
g. Monthly expenses areas follows: commissions, $12,150; rent, $2,650; other expenses(excluding depreciation), 8% of sales. Assume that these expensesare paid monthly. Depreciation is $2,550 for the quarter andincludes depreciation on new assets acquired during thequarter.
h. Equipment will beacquired for cash: $3,830 in January and $8,100 in February.
i. Management would like to maintaina minimum cash balance of $5,000 at the end of each month. Thecompany has an agreement with a local bank that allows the companyto borrow in increments of $1,000 at the beginning of each month,up to a total loan balance of $50,000. The interest rate on theseloans is 1% per month, and for simplicity, we will assume thatinterest is not compounded. The company would, as far as it isable, repay the loan plus accumulated interest at the end of thequarter.
Required:
Using the data above, complete thefollowing statements and schedules for the second quarter:
1. Schedule of expected cashcollections:
January | February | March | Total | |||
Cash sales | $31,800.00 | |||||
Credit sales | 36,900.00 |
|
|
| ||
Total collections | $68,700.00 |
|
|
| ||
2. a. Merchandise purchasesbudget:
January | February | March | Total | |||
Budgeted cost of goods | $55,650.00 | * | $62,160.00 | |||
Add desired ending inventory | 12,432.00 | â | ||||
Total needs | 68,082.00 | |||||
Less beginning inventory | 11,130.00 |
|
|
| ||
Required purchases | $56,952.00 |
|
|
| ||
*$79,500.00 sales à 70% =$55,650.00. | ||||||
â $88,800.00 Ã 70% Ã 20% =$12,432.00. |
b. Schedule of expected cashdisbursements for merchandise purchases:
January | February | March | Total | ||
December purchases | $32,880.00 | * | $32,880.00 | ||
January purchases | 14,238.00 | $42,714.00 | 56,952.00 | ||
February purchases | 0.00 | ||||
March purchases | 0.00 |
|
|
| |
Total cash disbursements forpurchases | $47,118.00 |
|
|
| |
*Beginning balance of the accountspayable. |
3. Schedule of expected cashdisbursements for selling and administrative expenses:
January | February | March | Total | |
Commissions | $12,150.00 | |||
Rent | 2,650.00 | |||
Other expenses | 6,360.00 |
|
|
|
Total cash disbursements forselling | $21,160.00 |
|
|
|
4. Cash budget:
January | February | March | Total | |
Cash balance, beginning | $ 6,700.00 | |||
Add cash collections | 68,700.00 |
|
|
|
Total cash available | 75,400.00 |
|
|
|
Less cash disbursements: | ||||
For inventory | 47,118.00 | |||
For operating expenses | 21,160.00 | |||
For equipment | 3,830.00 |
|
|
|
Total cash disbursements | 72,108.00 |
|
|
|
Excess (deficiency) of cash | 3,292.00 | |||
Financing | ||||
Etc. |
5. Prepare an incomestatement for the quarter ending March 31 as shown in Chapter7.
6. Prepare a balancesheet as of March 31.