Budgeted cash receipts in the month - budgeted cash payments in the month - budgeted cash at the start of the month = budgeted cash at the end of the month. True False
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- The amount of prepaid expense reflected in the disbursement section of the cash budget is the same amount that is found on the monthly operating statement. True FalseCash collections in a schedule of cash collections typically consist of collections on sales made to customers in prior periods plus collections on sales made in the current budget period. Select one: True FalseCash 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: July August $160,000 $185,000 $200,000 66,000 82,000 105,000 51,000 120,000 40,000 46,000 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. Sales Manufacturing costs Selling and administrative expenses Capital expenditures June Current assets as of June 1 include cash of $42,000,…
- g. Prepare a schedule of cash collected from customers for the quarter ended March 31, 20X1. h. Prepare the cash budget for the quarter ended March 31, 20X1.9. Which of the following will not appear in a cash budget in the same month? A. Cash sales B. Payment of Wages C. Purchase of machinery D. Credit sales1. Budgeted cash receipts in March 2. Budgeted accounts receivable at the end of March 3. Budgeted inventory at the end of February
- a .Prepare an estimate of cash position for three months from April to June b. Based on the budget prepared, evaluate the cash position of the comupany, give your comments and provide suitable suggestion to the management on effective cash managenent.Jim Daniels Health Products has eight stores. The firm wants to expand by two more stores and needs a bank loan to do this. Mr. Hewitt, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. Following are actual and forecasted sales figures: Actual November December $420,000 January 440,000 February March Forecast Additional Information $500,000 April forecast $550,000 540,000 560,000 of the firm's sales, 40 percent are for cash and the remaining 60 percent are on credit. Of credit sales, 30 percent are paid in the month after sale and 70 percent are paid in the second month after the sale. Materials cost 35 percent of sales and are purchased and received each month in an amount sufficient to cover the current month's expected sales. Materials are paid for in the month they are received. Labour expense is 45 percent of sales and is paid in the month of sales. Selling and administrative expense is 4 percent of…Carmen is a retailer of scrapbooking products. The sales forecast for the coming months is: Revenues April May $ 253,000 $ 272,000 $ 299,000 $ 346,000 $ 355,000 June July August Carmen's sales are 60% cash and 40% store credit. The credit sales are collected 60% in the month of sale, the remainder the following month. Accounts receivable on April 1 are $34,000. Carmen's cost of sales averages 65% of revenues. The inventory policy is to carry 30% of next month's sales needs. April 1 inventory will be as expected under the policy. Carmen pays for purchases 40% in the month of purchase and 60% the following month. Accounts payable on April 1 is $133,000. a. Prepare a purchases budget for as many months as is possible. April May June July August Sales Cost of Sales Percentage % % Cost of Sales Ending Inv Beginning Inv Purchases
- Question 8 Which of the following is NOT true about a cash budget? A. A cash budget sets out all cash receipts and payments that a business expects to make over a period of time. B. Cash budgets are usually prepared on a month-to-month basis. C. Cash budgets show the expected bank balance at the end of the month. D. Cash budgets include personal cash receipts and expenses.A budget is a historical record of the previous year’s financial activities; True or FalseCash 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: September October November Sales $110,000 $134,000 $183,000 Manufacturing costs 46,000 58,000 66,000 Selling and administrative 39,000 40,000 70,000 expenses Capital expenditures 44,000 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 $7,000 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…