FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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McMichael Inc. collects 90% of its sales on account in the month of the sale and 10% in the month following the sale. If sales on account are budgeted to be $162,000 for September and $146,000 for October, what are the budgeted cash receipts from sales on account for October?
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- Preparing a Cash Budget La Famiglia Pizzeria provided the following information for the month of October: Sales are budgeted to be $158,000. About 85% of sales is cash; the remainder is on account. La Famiglia expects that, on average, 70% of credit sales will be paid in the month of sale, and 28% will be paid in the following month. Food and supplies purchases, all on account, are expected to be $106,000. La Famiglia pays 25% in the month of purchase and 75% in the month following purchase. Most of the work is done by the owners, who typically withdraw $6,000 a month from the business as their salary. (Note: The $6,000 is a payment in total to the two owners, not per person.) Various part-time workers cost $7,300 per month. They are paid for their work weekly, so on average 90% of their wages are paid in the month incurred and the remaining 10% in the next month. Utilities average $5,950 per month. Rent on the building is $4,100 per month. Insurance is paid quarterly; the next…arrow_forwardAssume a company's sales budget for July estimates 17,000 units sold. The variable selling and administrative expense used for budgeting purposes is $4.00 per unit sold. The total budgeted cash disbursements for selling and administrative expenses in July is $139,000. The total fixed selling and administrative expenses included in the selling and administrative expense budget for July is $100,000. What is the amount of depreciation included in the selling and administrative expense budget for July? Multiple Choice O OOO $14,000 $32,000 $29,000 $47,000arrow_forwardCash budget-Basic Grenoble Enterprises had sales of $50,100 in March and $59,800 in April. Forecast sales for May, June, and July are $70,400, $79,700, and $99,800, respectively. The firm has a cash balance of $4,800 on May 1 and wishes to maintain a minimum cash balance of $4,800. Given the following data, prepare and interpret a cash budget for the months of May, June, and July. (1) The firm makes 23% of sales for cash, 64% are collected in the next month, and the remaining 13% are collected in the second month following sale. (2) The firm receives other income of $2,100 per month. (3) The firm's actual or expected purchases, all made for cash, are $50,400, $69,900, and $79,800 for the months of May through July, respectively. (4) Rent is $3,000 per month. (5) Wages and salaries are 8% of the previous month's sales. (6) Cash dividends of $3,400 will be paid in June. (7) Payment of principal and interest of $3,600 is due in June. (8) A cash purchase of equipment costing $6,400 is…arrow_forward
- Budgeting for a Merchandising Firm Goldberg Company is a retail sporting goods store thatuses an accrual accounting system. Facts regarding its operations follow:∙ Sales are budgeted at $250,000 for December and $225,000 for January, terms 1/eom, n/60.∙ Collections are expected to be 50% in the month of sale and 48% in the month following the sale.Two percent of sales are expected to be uncollectible and recorded in an allowance account at theend of the month of sale. Bad debts expense is included as part of operating expenses.∙ Gross margin is 30% of gross sales.∙ All accounts receivable are from credit sales. Bad debts are written off against the allowanceaccount at the end of the month following the month of sale.∙ Goldberg desires to have 80% of the merchandise for the following month’s sales on hand at the endof each month. Payment for merchandise is made in the month following the month of purchase.∙ Other monthly operating expenses to be paid in cash total $25,000.∙ Annual…arrow_forwardCapstone Inc. collects 80% of its sales on account in the month of the sale and 20% in the month following the sale. If sales on account are budgeted to be $399,000 for September and $479,000 for October, what are the budgeted cash receipts from sales on account for October?arrow_forwardCapstone Inc. collects 30% of its sales on account in the month of the sale and 70% in the month following the sale. If sales on account are budgeted to be $399,000 for September and $319,000 for October, what are the budgeted cash receipts from sales on account for October?$fill in the blank 1arrow_forward
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