Units Dollars April (actual) 5,500 $1,100,000 May(actual) 3,600 720,000 June(budgeted) 8,000 1,600,000 July(budgeted) 6,500 1,300,000 August (budgeted) 4,500 900,000
All sales are on credit. Recent experience shows that 28% ofcredit sales is collected in the month of the sale, 42% in themonth after the sale, 25% in the second month after the sale, and5% proves to be uncollectible. The productâs purchase price is $110per unit. All purchases are payable within 13 days. Thus, 60% ofpurchases made in a month is paid in that month and the other 40%is paid in the next month. The company has a policy to maintain anending monthly inventory of 21% of the next monthâs unit sales plusa safety stock of 185 units. The April 30 and May 31 actualinventory levels are consistent with this policy. Selling andadministrative expenses for the year are $1,548,000 and are paidevenly throughout the year in cash. The companyâs minimum cashbalance at month-end is $100,000. This minimum is maintained, ifnecessary, by borrowing cash from the bank. If the balance exceeds$100,000, the company repays as much of the loan as it can withoutgoing below the minimum. This type of loan carries an annual 11%interest rate. On May 31, the loan balance is $41,000, and thecompanyâs cash balance is $100,000. (Round final answers to thenearest whole dollar.) Prepare a table that shows the computationof cash collections of its credit sales (accounts receivable) ineach of the months of June and July Prepare a table that shows thecomputation of budgeted ending inventories (in units) for April,May, June, and July Prepare the merchandise purchases budget forMay, June, and July. Report calculations in units and then show thedollar amount of purchases for each month. Prepare a table showingthe computation of cash payments on product purchases for June andJuly. Prepare a cash budget for June and July, including any loanactivity and interest expense. Compute the loan balance at the endof each month. (Do not round intermediate calculations.)
| Units | Dollars | |
| April (actual) | 5,500 | $1,100,000 |
| May(actual) | 3,600 | 720,000 |
| June(budgeted) | 8,000 | 1,600,000 |
| July(budgeted) | 6,500 | 1,300,000 |
| August (budgeted) | 4,500 | 900,000 |
All sales are on credit. Recent experience shows that 28% ofcredit sales is collected in the month of the sale, 42% in themonth after the sale, 25% in the second month after the sale, and5% proves to be uncollectible. The productâs purchase price is $110per unit. All purchases are payable within 13 days. Thus, 60% ofpurchases made in a month is paid in that month and the other 40%is paid in the next month. The company has a policy to maintain anending monthly inventory of 21% of the next monthâs unit sales plusa safety stock of 185 units. The April 30 and May 31 actualinventory levels are consistent with this policy. Selling andadministrative expenses for the year are $1,548,000 and are paidevenly throughout the year in cash. The companyâs minimum cashbalance at month-end is $100,000. This minimum is maintained, ifnecessary, by borrowing cash from the bank. If the balance exceeds$100,000, the company repays as much of the loan as it can withoutgoing below the minimum. This type of loan carries an annual 11%interest rate. On May 31, the loan balance is $41,000, and thecompanyâs cash balance is $100,000. (Round final answers to thenearest whole dollar.) Prepare a table that shows the computationof cash collections of its credit sales (accounts receivable) ineach of the months of June and July Prepare a table that shows thecomputation of budgeted ending inventories (in units) for April,May, June, and July Prepare the merchandise purchases budget forMay, June, and July. Report calculations in units and then show thedollar amount of purchases for each month. Prepare a table showingthe computation of cash payments on product purchases for June andJuly. Prepare a cash budget for June and July, including any loanactivity and interest expense. Compute the loan balance at the endof each month. (Do not round intermediate calculations.)
Related questions
| Aztec Company sells its productfor $180 per unit. Its actual and projected sales follow. |
| Units | Dollars | |
| April (actual) | 6,000 | $1,080,000 |
| May (actual) | 3,200 | 576,000 |
| June (budgeted) | 8,000 | 1,440,000 |
| July (budgeted) | 7,000 | 1,260,000 |
| August(budgeted) | 4,100 | 738,000 |
| All sales are on credit. Recent experience shows that 28% ofcredit sales is collected in the month of the sale, 42% in themonth after the sale, 27% in the second month after the sale, and3% proves to be uncollectible. The productâs purchase price is $110per unit. All purchases are payable within 12 days. Thus, 60% ofpurchases made in a month is paid in that month and the other 40%is paid in the next month. The company has a policy to maintain anending monthly inventory of 22% of the next monthâs unit sales plusa safety stock of 115 units. The April 30 and May 31 actualinventory levels are consistent with this policy. Selling andadministrative expenses for the year are $1,212,000 and are paidevenly throughout the year in cash. The companyâs minimum cashbalance at month-end is $120,000. This minimum is maintained, ifnecessary, by borrowing cash from the bank. If the balance exceeds$120,000, the company repays as much of the loan as it can withoutgoing below the minimum. This type of loan carries an annual 12%interest rate. On May 31, the loan balance is $33,000, and thecompanyâs cash balance is $120,000. (Round final answers tothe nearest whole dollar.)
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| Aztec Company sells its productfor $180 per unit. Its actual and projected sales follow. |
| Units | Dollars | |
| April (actual) | 6,000 | $1,080,000 |
| May (actual) | 3,200 | 576,000 |
| June (budgeted) | 8,000 | 1,440,000 |
| July (budgeted) | 7,000 | 1,260,000 |
| August(budgeted) | 4,100 | 738,000 |
| All sales are on credit. Recent experience shows that 28% ofcredit sales is collected in the month of the sale, 42% in themonth after the sale, 27% in the second month after the sale, and3% proves to be uncollectible. The productâs purchase price is $110per unit. All purchases are payable within 12 days. Thus, 60% ofpurchases made in a month is paid in that month and the other 40%is paid in the next month. The company has a policy to maintain anending monthly inventory of 22% of the next monthâs unit sales plusa safety stock of 115 units. The April 30 and May 31 actualinventory levels are consistent with this policy. Selling andadministrative expenses for the year are $1,212,000 and are paidevenly throughout the year in cash. The companyâs minimum cashbalance at month-end is $120,000. This minimum is maintained, ifnecessary, by borrowing cash from the bank. If the balance exceeds$120,000, the company repays as much of the loan as it can withoutgoing below the minimum. This type of loan carries an annual 12%interest rate. On May 31, the loan balance is $33,000, and thecompanyâs cash balance is $120,000. (Round final answers tothe nearest whole dollar.)
|
Aztec Company sells its product for $160 per unit. Its actualand projected sales follow. |
| Units | Dollars |
April (actual) | 8,000 | $1,280,000 |
May (actual) | 1,800 | 288,000 |
June (budgeted) | 6,000 | 960,000 |
July (budgeted) | 6,000 | 960,000 |
August (budgeted) | 4,300 | 688,000 |
| All sales are on credit. Recent experience shows that 24% ofcredit sales is collected in the month of the sale, 46% in themonth after the sale, 28% in the second month after the sale, and2% proves to be uncollectible. The productâs purchase price is $110per unit. All purchases are payable within 13 days. Thus, 60% ofpurchases made in a month is paid in that month and the other 40%is paid in the next month. The company has a policy to maintain anending monthly inventory of 19% of the next monthâs unit sales plusa safety stock of 60 units. The April 30 and May 31 actualinventory levels are consistent with this policy. Selling andadministrative expenses for the year are $1,824,000 and are paidevenly throughout the year in cash. The companyâs minimum cashbalance at month-end is $120,000. This minimum is maintained, ifnecessary, by borrowing cash from the bank. If the balance exceeds$120,000, the company repays as much of the loan as it can withoutgoing below the minimum. This type of loan carries an annual 12%interest rate. On May 31, the loan balance is $41,500, and thecompanyâs cash balance is $120,000. (Round final answers tothe nearest whole dollar.)
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