Check Your Work 800 polnb Problem 7-22A Cash Budget with Supporting Schedules [L
ID: 2404534 • Letter: C
Question
Check Your Work 800 polnb Problem 7-22A Cash Budget with Supporting Schedules [LO7-2, LO7-4 LO7-8 equipment which ocour during May. The following information has been assembled lo assist in greparing a cash budget for the quarter a Budgeted monthly absorption costing income statements for Apnit-uly are Sales Cost of goods sold Gross magin $ 720,000 $ 840,000 $ 295,000 $ 500,000 504,000 588,000 206,500 350,000 216,000 252,000 88,500 150,000 0,000 119,000 34,500 50,000 Selling and administrative expenses: Selling expense Administrative expense Total selling and administrative expenses Net operating income 50,000 81,800 33,400 48,000 140,000 200,800 67,900 98,000 s 76.000 51,200 20,600 S 52,000 Includes $21.500 of depreciation each month b.Sios 20% for cash and 80% on account. c.Sales on accort are colected over a twen onth period with 10% oladed nto marth die 70% collected in the first month following the month of sale; and the remaining month following the month of sale.February's sales totaled $195,000, and March's sales tolaled $295,000. pad forinte moth of purchase. March 31 for inventory purchases during March total $133,000. month. The merchandise d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are The remain ng 50%is paidinthekkorg month. Accounts payable at 20% of the cost of the merchandise to be sold in the following e. Each month's endng r er tory must equal inventory at March 31 is $100,800. t. Dividends of $39,000will be declared and paid in Apri. g Land costing $47,000 will be purchased for cash in May. h. The cash balance at March 1 is $81,000; the company must maintain a cash balance of atleast $40,000 at the end of each month. company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $200,000. The interest rate on these loans is 1% per morithand for singloty wo wil assume that iterest is not ongounded. The ompany would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. . Prepare a schedule of expected cash collections for April, May, and June, and for the quarher in total. Answer is complete and correct Schedule of Expected Cash Collections Apri 144,000 168,000 $ 371,000 Cash sales Sales on account 31,200 212.400 576,000 537,600 23,600 165.200 57 600 403,200 March April May June 67.200 470,400 23,600 23 Total cash S?000 |s?600 |$ 668,200 |$ 1,751,800Explanation / Answer
Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. 2. Revised Cash Collection Schedule April May June Quarter Cash Sales 144000 168000 59000 371000 Feb Credit Sales No Change 31200 31200 Mar Credit Sales No Change 165200 47200 212400 April Credit Sales 144000 374400 57600 576000 May Credit Sales 168000 436800 604800 June Credit Sales 59000 59000 Total Cash Collection 484400 757600 612400 1854400 3. Revised Inventory Purchasing Budget April May June July Budgeted COGS 504000 588000 206500 350000 Add: Desired Ending Inventory 15% 88200 30975 52500 Total Needs 592200 618975 259000 Less: Beginning Inventory 100800 88200 30975 Required Inventory Purchase 491400 530775 228025 4. Revised Cash Disbursment for Purchases April May June Quarter Beginning Accounts Payable 133000 133000 April Pur 245700 245700 491400 May Pur 265388 265388 530775 June Pur 114013 114013 Total Cash Disb for Purchases 378700 511088 379400 1269188 5. Cash Disbursment for Selling and Admin Expense April May June Quarter Beginning Accounts Payable 0 0 April Exp 94800 23700 118500 May Exp 143440 35860 179300 June Exp 37120 37120 Total Cash Disb for SnD Exp 94800 167140 72980 334920