In preparation for the quarterly cash budget, the following information have been compiled. Month Sales Purchases August (actual) P3,000,000.00 P3.500,000.00 September (actual) P4,500,000.00 P2,000,000.00 October (forecast) P1,000,000.00 P500,000.00 November (forecast) P1,500,000.00 P750,000.00 December (forecast) P2,000,000.00 P1,000,000.00 (a) Total cash receipt for the month of December is P1,850,000. (b) The firm pays cash for 40 percent of its purchases. (C) The firm pays for 60 percent of its purchases the following month. (d) Salaries and wages amount to 15 percent of the preceding month's sales. (e) Sales commissions amount to 2 percent of the preceding month's sales. (f) Rental payments of P100,000 must be made each month. (g) A principal and interest payment on an outstanding loan is due in December of P150,000. (h) The firm pays dividends of P50,000 at the end of the quarter. () Fixed assets costing P600,000 will be purchased in December. ) Depreciation expense each month of P45,000. How much is the net cash flows in December? A P390,000 B (P155,000) (c) (P430,000) D P135,000
In preparation for the quarterly cash budget, the following information have been compiled. Month Sales Purchases August (actual) P3,000,000.00 P3.500,000.00 September (actual) P4,500,000.00 P2,000,000.00 October (forecast) P1,000,000.00 P500,000.00 November (forecast) P1,500,000.00 P750,000.00 December (forecast) P2,000,000.00 P1,000,000.00 (a) Total cash receipt for the month of December is P1,850,000. (b) The firm pays cash for 40 percent of its purchases. (C) The firm pays for 60 percent of its purchases the following month. (d) Salaries and wages amount to 15 percent of the preceding month's sales. (e) Sales commissions amount to 2 percent of the preceding month's sales. (f) Rental payments of P100,000 must be made each month. (g) A principal and interest payment on an outstanding loan is due in December of P150,000. (h) The firm pays dividends of P50,000 at the end of the quarter. () Fixed assets costing P600,000 will be purchased in December. ) Depreciation expense each month of P45,000. How much is the net cash flows in December? A P390,000 B (P155,000) (c) (P430,000) D P135,000
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter13: Budgeting And Standard Costs
Section: Chapter Questions
Problem 14CDQ
Related questions
Question
what is the correct answer
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College