B. Problem 1. Galaxy Lighting Company manufactures and sells lighting fixtures. Estimated sales for the next three months are: September P 350,000 October 500,000 November 400,000 Sales for August were $400,000. All sales are on account. Galaxy Lighting Company estimates that 60% of the accounts receivable are collected in the month of sale with the remaining 40% collected the following month. The units sell for $30 each. The cash balance for September 1 is $100,000. Generally, 60% of purchases are due and payable in the month of purchase with the remainder due the following month. Purchase cost per unit for materials is $18. The company maintains an end-of-the-month inventory of 1,000 units plus 10% of next month's unit sales. In addition to the information given, selling and administrative expenses paid in cash are $120,000 per month. Requirement: Prepare a monthly cash budget for September and October for Galaxy Lighting Company.

B. Problem 1. Galaxy Lighting Company manufactures and sells lighting fixtures. Estimated sales for the next three months are: September P 350,000 October 500,000 November 400,000 Sales for August were $400,000. All sales are on account. Galaxy Lighting Company estimates that 60% of the accounts receivable are collected in the month of sale with the remaining 40% collected the following month. The units sell for $30 each. The cash balance for September 1 is $100,000. Generally, 60% of purchases are due and payable in the month of purchase with the remainder due the following month. Purchase cost per unit for materials is $18. The company maintains an end-of-the-month inventory of 1,000 units plus 10% of next month's unit sales. In addition to the information given, selling and administrative expenses paid in cash are $120,000 per month. Requirement: Prepare a monthly cash budget for September and October for Galaxy Lighting Company.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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