e company has learned that 20% of a month’s sales are collected in the month of
Q: cash receipts
A: Cash budget is important for an entity in order to plan for day-to-day cash requirements and working…
Q: PRS company is preparing cash budget for the forthcoming year with the following details: 151 2nd…
A: A cash budget is a statement that is prepared so as to estimate the cash position over a specific…
Q: Part B: Cash Budgets You have been asked to prepare a cash budget for June and July 2022 for Dragon…
A: Cash Budget: - Cash Budget is the budget prepared by the business which contains all cash receipts…
Q: b) Assume the following budgeted data for June: • Purchases Selling and administrative expenses…
A: Every business makes estimates and forecasts for the future. These estimates are very important for…
Q: 2. Prepare a cash budget for Atlas Products, Inc. for the first year of 20X2, based on the following…
A: January: 75% of last month 577,500 25% of current month 172,500 Total : $750,000 February: 75%…
Q: Question 4: From the following, prepare a cash budget for August & September 2004 August July…
A: Collections from the credit sales are recovered in the next month of sales therefore it is counted…
Q: Compile AnYeLiR's Cash Budget. Co. for March, April and May. The company had sales in January and…
A: Cash budget refers to an estimation of cash inflows and outflows in a business over a specified…
Q: Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next…
A: Cash Budget : A cash budget itemizes the projected sources and uses of cash in a future period. This…
Q: uestion i) You have been asked to prepare a December cash budget for AB Company, a distributor of…
A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve first three…
Q: Kayak Co. budgeted the following cash recelpts (excluding cash recelpts from loans recelved) and…
A: Cash budget in business shows estimated or budgeted cash receipts and cash payments for future…
Q: A cash budget, by quarters, is given below for a retail company. (000 omitted). The company…
A: Cash budget is the budget showing all the cash receipts and outlays estimated for a future period.
Q: 2 company is preparing its cash budget for the first quarter of the year. It has $10,000 in cash at…
A: A cash budget is an estimation of money flows for a business over a particular period of time. This…
Q: Use this information about Dove Corporation to answer the question that follows. Dove Corporation…
A: Expected cash collection = cash sales for the month + collection of 70% of credit sale for same…
Q: P4-12 Cash budget: Advanced The Green PLC has projected following unit sales for Janu- ary 2019 to…
A: The question is based on the concept of preparation of cash receipt and disbursement for a company.…
Q: Cash Receipts Budget and Accounts Receivable Aging Schedule Shalimar Company manufactures and sells…
A: The budget for cash receipts shows the future cash receipts that the company could collect in a…
Q: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted…
A: The budget which estimates the future cash receipts of the business is referred to as the cash…
Q: Problem 5 (Preparation of Cash Budget) The sales forecast for January to May 20X4 and actual sales…
A: Cash budget shows the cash balance at the end of the month which is calculated as cash collections…
Q: 2. Prepare a cash budget for Atlas Products, Inc. for the first year of 20X2, based on the following…
A: The cash budget is prepared to estimate the inflows and outflows of cash during the future specified…
Q: 3 The accountant for Zachary's Dress Shop prepared the following cash budget. Zachary's desires to…
A: Calculate the missing amounts in the cash budget table as follows: The cash budget is divided into…
Q: Cash Budget; Income Statement; Balance Sheet; Changing Assumptions Refer to the data for Minden…
A: 1.
Q: 2. The following information has been assembled to assist in preparing a cash budget for the…
A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %…
Q: P4-10 Cash budget: Basic Farmers Delight Corporation reported sales of $350,000 in June, $380,000 in…
A: From the given information we have to prepare the cash budget for the month of September , October…
Q: Example 2: Cash Budget: Assuming the same details as in the purchases budget problem above, prepare…
A: In the problem we have to calculate cans budget from the given information
Q: 13 What is the estimated cost of goods sold alnu 14. What is the estimated total selling and…
A: The cash collection schedule shows the expected cash collections for the period.
Q: Cash Receipts from Credit Sales Walmart's budgeted sales are as follows: January $150,000…
A: Sales usually have a pattern, wherein only a certain percentage of sales are realized in cash and…
Q: Question #2 Cash budgeting is critical to a company’s financial information needs. The following…
A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %…
Q: Question #2 Cash budgeting is critical to a company’s financial information needs. The following…
A: Cash budget means the expected cash receipts and expected cash payment for the next year. Cash…
Q: ONLY ANSWER QUESTION (B) the task of preparing the cash budget for the business for the quarter…
A: A cash budget is an estimate of a corporation's cash flows for a given time span. A cash budget is…
Q: Capstone Inc. collects 35% of its sales on account in the month of the sale and 65% in the month…
A: Cash collection in October from September sales = September sales x 65% = $541,000 x 65% = $351,650
Q: Reck Chocolates reports the following information from its sales budget: Expected Sales amount: July…
A: Cash budget means expected cash receipts and expected cash payment with opening and closing cash…
Q: Question6: Company wants to prepare a cash budget for May, June, and July. At the end of every…
A: Cash budget is prepared based on the estimated cash inflows and outflows for decision making that is…
Q: Cash Receipts Budget and Accounts Receivable Aging Schedule Shalimar Company manufactures and sells…
A: The cash receipts budget is prepared to record the cash sales or cash collection from customers…
Q: Recent and forecasted sales: October $280,000 December $161,000 February $413,000 April $280,000…
A: A budget is a forecast of revenue and expenses for a certain future period of time that is generally…
Q: Project 3-Cash budgets and budgeted financial statements (Chapters 4 and 5) Question 1 P. Tiro…
A: Cash Budget - It is a statement showing an estimation of the cash flows of the business for a…
Q: Problem 1 As treasurer of a manufacturing company, you are preparing a cash budget for September of…
A: Accounts payable: It is the current liability to an organization. It is the amount payable to the…
Q: Cash collections. ABC makes collections on sales as follows: 20% in the month of sale, 50% in the…
A: Cash Collection in June = (April sales x 30%) + (May sales x 50%) + (June sales x 20%)
Q: Prepare a cash budget for the first quarter of 2021. Clearly show the amounts for cash sales, credit…
A:
Q: uestion Content Area Cash Receipts Budget and Accounts Receivable Aging Schedule Shalimar Company…
A: Cash sales and credit sales expected A cash receipts budget for Shalimar Company A revised cash…
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Exercise 1 (Schedule of expected Cash Collection)
Peak sales for Mideast Products, Inc., occur in August. The company's sales budget for the third quarter showing these peak sales is given below:
July August September Total
Budgeted sales ................ P600,000 P900,000 P500,000 P2,000.000
From past experience, the company has learned that 20% of a month’s sales are
collected in the month of sale, that another 70% is collected in the month following
sale, and that the remaining 10% is collected in the second month following sale.
June sales totaled P540,000.
Required:
- Prepare a schedule of expected cash collections from sales, by month
and in total, for the third quarter.
- Assume that the company will prepare a budgeted
statement of financial
position as of September 30. Compute the accounts receivable as of that
date.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Relevant data from the Poster Companys operating budgets are: Additional data: Capital assets were sold in January for $10,000 and $4,500 in May. Dividends of $4,500 were paid in February. The beginning cash balance was $60,359 and a required minimum cash balance is $59,000. Use this information to prepare a cash budget for the first two quarters of the yearRelevant data from the operating budget of The Framers are: Other data: Capital assets were sold in quarter 1 and $8,000 was collected in quarter 1 and $500 collected in quarter 2. Dividends of $500 will be paid in May The beginning cash balance was $50,000 and a required minimum cash balance is $10,000. Prepare a cash budget for the first two quarters of the year.Cash budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent 50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of 40,000, marketable securities of 75,000, and accounts receivable of 300,000 (60,000 from July sales and 240,000 from August sales). Sales on account for July and August were 200,000 and 240,000, respectively. Current liabilities as of September 1 include 40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 55,000 will be made in October. Bridgeports regular quarterly dividend of 25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of 50,000. Instructions Prepare a monthly cash budget and supporting schedules for September, October, and November. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
- Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of 15.9 million and cost of goods sold of 8.75 million. Advertising is a key part of Coral Seas business strategy, and total marketing expense for the year is budgeted at 2.8 million. Total administrative expenses are expected to be 675,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required: 1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year. 2. What if Coral Seas had interest payments of 500,000 during the year? What effect would that have on operating income? On income before taxes? On net income?Cash budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the sale and the remainder the following month (second month after sale). Depreciation, insurance, and property tax expense represent 12,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in February, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of June 1 include cash of 42,000, marketable securities of 25,000, and accounts receivable of 198,000 (150,000 from May sales and 48,000 from April sales). Sales on account in April and May were 120,000 and 150,000, respectively. Current liabilities as of June 1 include 13,000 of accounts payable incurred in May for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 24,000 will be made in July. Mercury Shoes regular quarterly dividend of 15,000 is expected to be declared in July and paid in August. Management desires to maintain a minimum cash balance of 40,000. Instructions Prepare a monthly cash budget and supporting schedules for June, July, and August. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2014 and 2015: May 2014 180,000 June 180,000 July 360,000 August 540,000 September 720,000 October 360.000 November 360,000 December 90,000 January 2015 180.000 Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: May 2014 90,000 June 90,000 July 126,000 August 882.000 September 306,000 October 234,000 November 162,000 December 90,000 General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses arc S2,700 a month. Income tax payments of 63,000 arc due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2014. b. Prepare monthly estimates of the required financing or excess funds that is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 130 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal; and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.
- CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2016 and 2017. May 2016 180,000 June 180,000 July 360,000 August 540,000 September 720,000 October 360,000 November 360,000 December 90,000 January 2017 180,000 Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale. 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: May 2016 90,000 June 90,000 July 126,000 August 882,000 September 306,000 October 234,000 November 162,000 December 90,000 General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depredation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2016. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal; and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if ail financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.Barnstormer sells airplane accessories for $20 each. It expects sales of 120,000 units in quarter 1 and a 7% increase each subsequent quarter for the next 8 quarters. Prepare a sales budget by quarter for the first year.CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2019 and 2020: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2019. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal, and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.
- CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2015 and 2016: May 2015 180,000 June 180,000 July 360,000 August 540,000 September 720,000 October 360,000 November 360,000 December 90,000 January 2016 180,000 Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: May 2015 90,000 June 90,000 July 126,000 August 882,000 September 306,000 October 234,000 November 162,000 December 90,000 General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2015. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1 30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal; and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.Exercise 1 (Schedule of Expected Cash Collections) Peak sales for Mideast Products, Inc., occur in August. The company's sales budget for the third quarter showing these peak sales is given below: July P600,000 August P900,000 Total September P2,000,000 Budgeted sales P2,000,000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, that another 70% is collected in the month following sale, and that the remaining 10% is collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled P430,000 and June sales totaled P540,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. 2. Assume that the company will prepare a budgeted statement of financial position as of September 30. Compute the accounts receivable as of that date.III. EXERCISES Exercise 1 (Schedule of expected Cash Collection) Peak sales for Mideast Products, Inc., occur in August. The company's sales budget for the third quarter showing these peak sales is given below: July August September Total Budgeted sales P600,000 P900,000 P2,000,000 P2,000.000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, that another 70% is collected in the month following sale, and that the remaining 10% is collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled P430,000 and June sales totaled P540,000. Required: 1. Prepare a schedule of expected cash collections from sales, bymonth and in total, for the thirdquarter. 2. Assume that the company will prepare a budgeted statement of financial position as of September 30. Compute the accounts receivable as ofthat date.