Could you help me produce the expected cash collection from customers? Other Information:Sydney rented all of her equipment and furnishings in 2020 but has decided to purchase newequipment and furnishings in January of 2021. Sydney has found a seller that has all of theequipment and furnishings that she needs. Sydney has the cash to pay one-half of the total costin January of 2021, and she will sign a 12-month, 6% bank note to fund the remaining balance.The note will be outstanding for the entire 2021 year. Monthly interest payments will begin onFebruary 2, 2021. The principal along with the last interest payment will become due on January2, 2022. Sydney decided to purchase the following items under the terms stated above as ofJanuary 1, 2021 and will depreciate them on a straight-line basis with no salvage value:Equipment & FurnitureCostLifePress that applies ink$12,0005 yearsLight-exposure table2,00010 yearsDisplay furniture for retail area5,00010 yearsComputer hardware & software for shirtdesign and production4,0004 yearsDryer conveyer belt3,00010 yearsComputer hardware & software foradministrative and sales activities2,0005 yearsBlank T-shirts is the only direct material used in the production process. The cost per shirt willremain at the 2018 price, $8. Credit terms will also carry over from 2020; 40% due in thequarter of purchase with the remaining 60% to be paid in the foll owing quarter. Sydney willmaintain an ending inventory of blank shirts equal to 20% of the next quarter's productionvolume. Shirts to be silk-screened are considered direct materials inventory.There is no beginning finished goods inventory for the budget year, but Sydney has decided tomaintain an ending finished goods inventory each quarter equal to 10% of the upcomingquarter's sales volume.Assume FIFO is applied to all inventory costs, and assume no WIP inventory balances.Sydney estimates the number of shirts to be sold in the next six quarters, beginning January2021, to be:First Quarter, year 202114,000Second Quarter, year 202111,000Third Quarter, year 202115,000Fourth Quarter, year 202113,000First Quarter, year 202217,000Second Quarter, year 202212,000 The selling price of each shirt will be $15. Ten percent of sales are projected to be cash saleswith the remaining sales on account. Some accounts had to be written off last year, so onepercent of credit sales are going to be budgeted as bad debt in each quarter of 2021. Of thecollectible credit sales, Sydney requires customers to pay 65% in the quarter of the sale and paythe remaining balance in the following quarter. Assume the remaining balance from 2020 is100% collectible and that no write-offs for the budget year will occur until 2022.The estimated cost of ink used in the silk-screen process will be $68,375 in 2021 and will beapplied quarterly based on the number of shirts produced. This cost is treated as an indirectmaterial cost.Knowing that the silk-screen process is labor intensive, Sydney plans to hire six students to helpwith the process. Based on Sydney's production projections, 5,470 hours of labor will beincurred during 2019 at an hourly rate of $12. Sydney expects that 95% of each quarter's laborcost will be paid in the quarter incurred. The remaining cost will be paid in the followingquarter.Sydney needed one person to handle some administrative duties along with working in sales.Andy Lane, Director of Student Development at West State, was hired for this position. Andyknows the officers of all student organizations on campus and is also very active in thecommunity. Because of his contacts, Sydney is willing to pay Andy $750 per month plus a 5%sales commission on all sales.Sydney also had to find a person skilled in computer graphics to generate the designs to beprinted on the shirts. She hired a graphics designer at a rate of $600 per month plus $0.15 foreach shirt printed. The entire cost of the graphic designer is treated as indirect labor.The lease for a commercial building near the university and the downtown area requires monthlyrent of $1,500. 80% of the building will be used in the silk-screen process and 20% will be usedfor sales and administration.Maintenance and utility costs are both considered mixed costs. Sydney is confident that themaintenance and utility costs from 2020 can be used to generate the budgeted costs for 2021.The variable costs budgeted for maintenance and utilities are treated as product costs and drivenby production volume, but the fixed costs for these two items are to be treated like rent; 80%incurred due to the silk-screen process and 20% incurred for sales and administrative activities.Data for maintenance and utility costs incurred in 2020 follow:

Name: Could you help me produce the expected cash collection from customers?
Uploaded: 2024-03-04T10:43:15.000Z
Channel: Bartleby
Description: Could you help me produce the expected cash collection from customers? Other Information:Sydney rented all of her equipment and furnishings in 2020 but has decided to purchase newequipment and furnishings in January of 2021. Sydney has found a seller

What is meant by expected Cash collection from customers? When a company sells goods on credit at…

Business

Accounting

Other Information: Sydney rented all of her equipment and furnishings in 2020 but has decided to purchase new equipment and furnishings in January of 2021. Sydney has found a seller that has all of the equipment and furnishings that she needs. Sydney has the cash to pay one-half of the total cost in January of 2021, and she will sign a 12-month, 6% bank note to fund the remaining balance. The note will be outstanding for the entire 2021 year. Monthly interest payments will begin on February 2, 2021. The principal along with the last interest payment will become due on January 2, 2022. Sydney decided to purchase the following items under the terms stated above as of January 1, 2021 and will depreciate them on a straight-line basis with no salvage value: Equipment & Furniture Cost Life Press that applies ink $12,000 5 years Light-exposure table 2,000 10 years Display furniture for retail area 5,000 10 years Computer hardware & software for shirt design and production 4,000 4 years Dryer conveyer belt 3,000 10 years Computer hardware & software for administrative and sales activities 2,000 5 years Blank T-shirts is the only direct material used in the production process. The cost per shirt will remain at the 2018 price, $8. Credit tems will also carry over from 2020%; 40% due in the quarter of purchase with the remaining 60% to be paid in the foll owing quarter. Sydney will maintain an ending inventory of blank shirts equal to 20% of the next quarter's production volume. Shirts to be silk-screened are considered direct materials inventory. There is no beginning finished goods inventory for the budget year, but Sydney has decided to maintain an ending finished goods inventory each quarter equal to 10% of the upcoming quarter's sales volume. Assume FIFO is applied to all inventory costs, and assume no WIP inventory balances. Sydney estimates the number of shirts to be sold in the next six quarters, beginning January 2021, to be: First Quarter, year 2021 14,000 Second Quarter, year 2021 11,000 Third Quarter, year 2021 15,000 Fourth Quarter, year 2021 13,000 First Quarter, year 2022 17,000 Second Quarter, year 2022 12,000