On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company's sales are made on account. The following information has been provided by Spicer's management. Month January February March April May Credit Sales $300,000 (actual) 400,000 (actual) 473,000 (estimated) 671,000 (estimated) 800,000 (estimated) The company's collection activity on credit sales historically has been as follows. Collections in the month of the sale Collections one month after the sale Collections two months after the sale Uncollectible accounts 50% 30 15 5 Spicer's total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400,000 per month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter. Compute Spicer's budgeted cash balance at the ends of March, April, and May. Answer is complete but not entirely correct. Cash balance on March 31 $ 456,500 Cash balance on April 30 $ 533,900 Cash balance on May 31 $ 735,200

On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company's sales are made on account. The following information has been provided by Spicer's management. Month January February March April May Credit Sales $300,000 (actual) 400,000 (actual) 473,000 (estimated) 671,000 (estimated) 800,000 (estimated) The company's collection activity on credit sales historically has been as follows. Collections in the month of the sale Collections one month after the sale Collections two months after the sale Uncollectible accounts 50% 30 15 5 Spicer's total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400,000 per month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter. Compute Spicer's budgeted cash balance at the ends of March, April, and May. Answer is complete but not entirely correct. Cash balance on March 31 $ 456,500 Cash balance on April 30 $ 533,900 Cash balance on May 31 $ 735,200

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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required: Use this information to prepare a cash budget for the first two quarters of the year
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he following table lists data from the budget of Ritewell Publishers. Half the company’s sales are for cash on the nail; the other half are paid for with a one-month delay. The company pays all its credit purchases with a one-month delay. Credit purchases in January were $47, and total sales in January were $214. Assume all expenses, other than purchases, are cash transactions. February March April Total sales $234 $254 $214 Purchases of materials For cash 87 97 77 For credit 57 47 57 Other expenses 47 47 47 Taxes, interest, and dividends 27 27 27 Capital investment 30 0 0 Complete the cash budget in the following table.
sh On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company's sales are made on account. The following infor- mation has been provided by Spicer's management. Month January February March April May Credit Sales Collections in the month of the sale Collections one month after the sale Collections two months after the sale Uncollectible accounts ary. The company's collection activity on credit sales historically has been as follows. $300,000 (actual) 400,000 (actual) 600,000 (estimated) 700,000 (estimated) 800,000 (estimated) 50% 30 15 5 Spicer's total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400,000 per month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter. Compute Spicer's budgeted cash balance at the ends of March, April, and May.
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