Preparing a financial budget—schedule of cash receipts
Victors expects total sales of $702,000 for January and $349,000 for February. Assume that Victor's sales are collected as follows:
50% in the month of the sale
30% in the month after the sale
16% two months after the sale
4% never collected
November sales totaled $388,000, and December sales were $407,000. Prepare a schedule of cash receipts from customers for January and February. Round answers to the nearest dollar.
Total cash receipts from the customers is $535,180 in the month of January and $450,220 in the month of February.
The structure and table formed for measuring the cash balances in the form of gained.
Total budgeted sales
Cash receipts from customers:
50 % in the month of sale
30% in the month after sale
16% two months after sales
Total cash receipts from customers
Preparing a financial budget—cash budget
You recently began a job as an accounting intern at Reilly Golf Park. Your first task was to help prepare the cash budget for April and May. Unfortunately, the computer with the budget file crashed, and you did not have a backup or even a paper copy. You ran a program to salvage bits of data from the budget file. After entering the following data in the budget, you may have just enough information to reconstruct the budget.
Reilly Golf Park eliminates any cash deficiency by borrowing the exact amount needed from First Street Bank, where the current interest rate is 6% per year. Reilly Golf Park first pays interest on its outstanding debt at the end of each month. The company then repays all borrowed amounts at the end of the month with any excess cash above the minimum required but after paying monthly interest expenses. Reilly does not have any outstanding debt on April 1.
Complete the cash budget. Round interest expense to the nearest whole dollar.
Preparing a financial budget—schedule of cash receipts and schedule of cash payments
Agua Cool is a distributor of bottled water. For each of the items, compute the amount of cash receipts or payments Agua Cool will budget for September. The solution to one item may depend on the answer to an earlier item.
a. Management expects to sell equipment that cost $14,000 at a gain of $7,000. Accumulated depreciation on this equipment is $5,000.
b. Management expects to sell 7,100 cases of water in August and 9,000 cases in September. Each case sells for $14. Cash sales average 20% of total sales, and credit sales make up the rest. Three-fourths of credit sales are collected in the month of the sale, with the balance collected the following month.
c. The company pays rent and property taxes of $4,500 each month. Commissions and other selling expenses average 30% of sales. Agua Cool pays one-half of commissions and other selling expenses in the month incurred, with the balance paid the following month.
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