The Adams Company, a merchandising firm, has budgeted its activity for November according to the following information:Sales at $500,000, all for cashMerchandise inventory on October 31 was $200,000.The cash balance November 1 was $18,000.Selling and administrative expenses are budgeted at $60,000 for November and are paid for in cash.Budgeted depreciation for November is $25,000.The planned merchandise inventory on November 30 is $230,000.The cost of goods sold is 70% of the selling price.All purchases are paid for in cash.The budgeted cash receipts for November are:$475,000$450,000$135,000$350,000$500,000$315.000$355.000 The budgeted net income for November is:$75,000$35,000$135,000$84,000$50,000$65,000$68,000 The budgeted cash disbursements for November are:$345,000$440,000$375,000$530,000$380,000$410,000$405,000 Enter Write to

The cash budget is prepared to record the cash receipts and cash payments during the period.

Answered: The Adams Company, a merchandising…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 15E: Palmgren Company produces consumer products. The sales budget for four months of the year is...

See similar textbooks

Related questions

Concept explainers

Question

The Adams Company, a merchandising firm, has budgeted its activity for November according to the following information:

Sales at $500,000, all for cash
Merchandise inventory on October 31 was $200,000.
The cash balance November 1 was $18,000.
Selling and administrative expenses are budgeted at $60,000 for November and are paid for in cash.
Budgeted depreciation for November is $25,000.
The planned merchandise inventory on November 30 is $230,000.
The cost of goods sold is 70% of the selling price.
All purchases are paid for in cash.

The budgeted cash receipts for November are:

$475,000

$450,000

$135,000

$350,000

$500,000

$315.000

$355.000

The budgeted net income for November is:

$75,000

$35,000

$135,000

$84,000

$50,000

$65,000

$68,000

The budgeted cash disbursements for November are:

$345,000

$440,000

$375,000

$530,000

$380,000

$410,000

$405,000

Enter

Write to

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions