Clay Co.'s projected sales are as follows:August$400,000September$450,000October$550,000Clay estimates that it will collect 30% in the month of sale, 50% in the month after the sale, and 18% in the second monthfollowing the sale. Two percent of all sales are estimated to be bad debts.Instructions: How much are Clay Co.'s budgeted cash receipts for October?

Budgeted cash receipts are the cash amounts you anticipate receiving based on the sales forecast in…

Answered: August $400,000 September $450,000…

August $400,000 September $450,000 $550,000 October Clay estimates that it will collect 30% in the month of sale, 50% following the sale. Two percent of all sales are estimated to be

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 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...

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A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and the remainder are credit sales. The company finds that typically 10 percent of a months credit sales are paid in the month of sale, 70 percent are paid the next month, and 15 percent are paid in the second month after sale. Expected cash receipts in July are budgeted at what amount? a. 114,520 b. 143,150 c. 145,720 d. 156,000
Carmichael Corporation is in the process of preparing next years budget. The pro forma income statement for the current year is as follows: Required: 1. What is the break-even sales revenue (rounded to the nearest dollar) for Carmichael Corporation for the current year? 2. For the coming year, the management of Carmichael Corporation anticipates an 8 percent increase in variable costs and a 60,000 increase in fixed expenses. What is the break-even point in dollars for next year? (CMA adapted)
Ranger Industries has provided the following information at June 30: Other information: Average selling price, 196 Average purchase price per unit, 110 Desired ending inventory, 40% of next months unit sales Collections from customers: In month of sale20% In month after sale50% Two months after sale30% Projected cash payments: Inventory purchases are paid for in the month following acquisition. Variable cash expenses, other than inventory, are equal to 25% of each months sales and are paid in the month of sale. Fixed cash expenses are 40,000 per month and are paid in the month incurred. Depreciation on equipment is 2,000 per month. REQUIREMENT You have been asked to prepare a master budget for the upcoming quarter (July, August, and September). The components of this budget are a monthly sales budget, a monthly purchases budget, a monthly cash budget, a forecasted income statement for the quarter, and a forecasted September 30 balance sheet. The worksheet MASTER has been provided to assist you. Ranger Industries desires to maintain a minimum cash balance of 8,000 at the end of each month. If this goal cannot be met, the company borrows the exact amount needed to reach its goal. If the company has a cash balance greater than 8,000 and also has loans payable outstanding, the amount in excess of 8,000 is paid to the bank. Annual interest of 18% is paid on a monthly basis on the outstanding balance.
Earthies Shoes has 55% of its sales in cash and the remainder on credit. Of the credit sales, 70% is collected in the month of sale, 15% is collected the month after the sale, and 10% is collected the second month after the sale. How much cash will be collected in June if sales are estimated as $75,000 in April, $65,000 in May, and $90,000 in June?
Miller Corporation has the following sales budget for the third quarter of 2021: Month Sales July $400,000 August $320,000 September $500,000 Historically, the following trend has been established regarding cash collection of sales: 60 percent of sales are paid in month of sale 35 percent of sales are paid in month following the sale 5 percent of sales are uncollectible and are written off in the month following the sale The expected total cash receipts for the month of September is: A. $300,000. B. $25,000. C. $112,000. D. $412,000.
A company’s sales on account for the coming months are as follows: May $120,000 June $126,000 July $132,300 The company finds that typically 70 percent of a month’s credit sales are paid in the month of sale, 20 percent are paid the next month, and 10 percent are paid in the second month after sales. Expected cash receipts in July are budgeted at what amount?
Pacific Place has developed the following sales forecast for the following months. Month Sales May $500,000 June $650,000 July $380,000 August $300,000 The collection policy for customers is: 40 percent in the month of sale 60 percent in the following month after sale How much is the expected total cash collections from customers in June? Multiple Choice $610,000 $260,000 $590,000 $560,000 $300,000
Management wants to know if there will be a need for short-term financing in February. Essential information is as follows: Estimated sales for January and February are $1.1 million and $750,000, respectively. Sixty percent of sales are for cash and 40 percent are credit sales that are collected the next month. Cash disbursements that vary with sales are 35 percent of sales. Fixed operating disbursements are $400,000 a month. Depreciation expense is $50,000 a month. A tax payment of $70,000 is due in January. A bond payment of $250,000 is owed and will be due in February. The cash balance at the beginning of January is $12,000. Management seeks a minimum cash balance of $9,000. December credit sales were $110,000. Round your answers to the nearest dollar. Use a minus sign to enter shortage of cash, if any. January February Excess (shortage) of cash $ $ The firm need short-term funds in February.
Power Ridge Corporation has forecast credit sales for the fourth quarter of the year as follows: September (actual) October November December Fourth Quarter $66,000 $56,000 51,000 76,000 Experience has shown 30 percent of sales are collected in the month of sale, 65 percent are collected in the following month, and 5 percent are never collected. Prepare a cash receipts schedule for Power Ridge Corporation covering the fourth quarter (October through December). Power ridge corporation Cash Receipts Schedule September $ Sales Collections of Current Sales Collections of prior month's Sales Total cash receipts October $ $ November $ $ December $ $
Fine Co. has the following sales forecasts for the third quarter of 2021: P85,000 (July), P88,000 (Aug), P82,000 (Sep). All sales are on credit. Seventy-five percent are collected in the month of sales and remainder is collected the following month. Minimum cash balance is P10,000. How much cash would be collected in September from sales? A P61,500 P66,000 P87,250 D P83,500
ABC Farm is preparing a collection budget for the year. Sales are expected to be P100,000 in January; P200,000 in February; and P300,000 in March. Approximately 60% of the sale is collected during the month of sale and the other 40% is collected in the following month. What is the ending accounts receivable balance of March? 1. P 80,000 2. P120,000 3. P180,000 4. P200,000 1 O 2 O 4
Bantam Industries has budgeted the following information for March: Cash receipts Beginning cash balance Cash payments Desired ending cash balance $351,000 25,000 400,000 45,000 If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 increments, and interest is paid monthly at 1% on the first day of the following month. The company had no debt before March 1. How much cash will the company need to borrow in March?