jacobjurt

jacobjurt

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jacobjurtHarvard University

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Management3English4Accounting2Calculus2Chemistry3
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Randall Company is a merchandising company that sells a singleproduct. The company's inventories, production, and sales in unitsfor the next three months have been forecasted as follows:

October November December
Beginninginventory 20,000 20,000 20,000
Merchandisepurchases 58,000 68,000 33,000
Sales 58,000 68,000 38,000
Endinginventory 20,000 20,000 15,000

Units are sold for $13 each. One fourth of all sales are paidfor in the month of sale and the balance are paid for in thefollowing month. Accounts receivable at September 30 totaled$464,000.

Merchandise is purchased for $7 per unit. Half of the purchasesare paid for in the month of the purchase and the remainder arepaid for in the month following purchase. Selling andadministrative expenses are expected to total $134,000 each month.One half of these expenses will be paid in the month in which theyare incurred and the balance will be paid in the following month.There is no depreciation. Accounts payable at September 30 totaled$304,000 includes selling and administrative payables.

Cash at September 30 totaled $94,000. A payment of $314,000 forpurchase of equipment is scheduled for November, and a dividend of$214,000 is to be paid in December.

Required:
a.

Prepare a schedule of expected cash collections for each of themonths of October, November, and December. (Omit the "$"sign in your response.)

Schedule of Expected Cash Collections
October November December
Sales $ $ $
September accountsreceivable $
October sales $
November sales $
December sales
Total cashcollections $ $ $
b.

Prepare a schedule showing expected cash disbursements formerchandise purchases and selling and administrative expenses foreach of the months October, November, and December. (Omitthe "$" sign in your response.)

Schedule of Expected Cash Disbursements
October November December
Merchandisepurchases $ $ $
Selling andadministrative expenses
Total incurred $ $ $
Disbursements,previous month $ $ $
Disbursements,current month
Total $ $ $
c.

Prepare a cash budget for each of the months October, November,and December. There is no minimum required ending cashbalance. (Input all amounts as positive values.Omit the "$" sign in your response.)

Randall Company
Cash Budget
October November December
Beginning cashbalance $ $ $
Add cashreceipts
Total cashavailable $ $ $
Disbursements
Accounts payable
Payment forequipment
Payment for dividend
Totaldisbursements
Ending cashbalance $ $ $
Randall Company is a merchandising company that sells a single product. The co...
A manager can determine whether their firm needs improvement in control by ana...

Randall Company is a merchandising company that sells a single product. The company's inventories, cost of goods sold, and sales in dollars for the next two months have been forecasted as follows:

 

 

October

November

 

Beginning inventory ..............................................................................................................

12,000

????

 

Cost of Goods Sold..............................................................................................................

45,000

95,000

 

Sales ..............................................................................................................

80,000

190,000

 

Ending inventory ..............................................................................................................

5,000

10,000

 

            35% of all sales are cash sales and the remainder are credit sales.  50% of the credit sales are collected in the 1st month following the sale and 45% collected the 2nd month following. September sales totaled $100,000 and August sales totaled $60,000.

            All inventory purchases are made on account.  Half of the purchases are paid for in the month of the purchase and the remainder is paid in the month following purchase.  The balance for inventory purchases in Accounts Payable on September 30 totaled $16,000.

            Salaries paid during each month total $17,000.  Other selling and administrative expenses to be paid each month are expected to be 10% of sales.

            Cash on September 30 totaled $10,000.  A cash dividend in the amount of $15,000 will be paid in October. 

            Randall Company has established a credit line with the bank to assist with cash flow needs.  Randall is required to maintain a minimum balance of $10,000 in its bank account and may borrow funds at any time from the bank in an amount not to exceed $100,000 at any one time.  Borrowing and repayment must be made in $1,000 increments.  Interest is 12% and is paid on the full balance owed when principal payments are made.  Principal payments are unscheduled, and the timing of principal payments is left to the discretion of Randall Company whenever sufficient excess cash flow is available to make payments.  As of September 30, there were no funds borrowed.  Borrowing always occurs at the beginning of a month and repayments always occur at the end of a month.

 

Prepare, in good form, the following schedules for the two-month period: Oct and Nov.

  1. Schedule of Cash Collections
  2. Schedule of Inventory Purchases
  3. Schedule of Cash Disbursements for Inventory Purchases
  4. Schedule of Cash Disbursements for Operating Expenses
  5. Cash Budget
Schedule of Cash Collections: October Cash Sales: $28,000 (35% of $80,000) Cre...

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