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Papst Company is preparing its cash budget for the month of May. The following information is available concerning its accounts receivable (based on sales made to customers on open account): Actual credit sales for March Actual credit sales for April Estimated credit sales for May Estimated collections in the month of sale Estimated collections in the first month after the month of sale Estimated collections in the second month after the month of sale Estimated provision for bad debts (made in the month of sale) The firm writes off all uncollectible accounts at the end of the second month after the month of sale. Required: Determine for Papst Company for the month of May: $ 140,000 $ 174,000 $ 234,000 1. The estimated cash receipts from accounts receivable collections. 2. The gross amount of accounts receivable at the end of the month (after appropriate write-off of uncollectible accounts). 3. The net amount of accounts receivable at the end of the month. Estimated cash receipts Gross accounts receivable 25% 60% 10% 5% 4. Recalculate requirements 1 and 2 under the assumption that estimated collections in the month of sale equal 60% and in the first month following the month of sale equal 25%. 1. 2. 3. Net accounts receivable 4a. Estimated cash receipts 4b. Gross accounts receivable

Papst Company is preparing its cash budget for the month of May. The following information is available concerning its accounts receivable (based on sales made to customers on open account): Actual credit sales for March Actual credit sales for April Estimated credit sales for May Estimated collections in the month of sale Estimated collections in the first month after the month of sale Estimated collections in the second month after the month of sale Estimated provision for bad debts (made in the month of sale) The firm writes off all uncollectible accounts at the end of the second month after the month of sale. Required: Determine for Papst Company for the month of May: $ 140,000 $ 174,000 $ 234,000 1. The estimated cash receipts from accounts receivable collections. 2. The gross amount of accounts receivable at the end of the month (after appropriate write-off of uncollectible accounts). 3. The net amount of accounts receivable at the end of the month. Estimated cash receipts Gross accounts receivable 25% 60% 10% 5% 4. Recalculate requirements 1 and 2 under the assumption that estimated collections in the month of sale equal 60% and in the first month following the month of sale equal 25%. 1. 2. 3. Net accounts receivable 4a. Estimated cash receipts 4b. Gross accounts receivable

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 4P
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Papst Company is preparing its cash budget for the month of May. The following information is available concerning its accounts receivable (based on sales made to customers on open account): Actual credit sales for March Actual credit sales for April Estimated credit sales for May Estimated collections in the month of sale Estimated collections in the first month after the month of sale Estimated collections in the second month after the month of sale Estimated provision for bad debts (made in the month of sale) The firm writes off all uncollectible accounts at the end of the second month after the month of sale. Required: Determine for Papst Company for the month of May: $ 140,000 $ 174,000 $ 234,000 1. The estimated cash receipts from accounts receivable collections. 2. The gross amount of accounts receivable at the end of the month (after appropriate write-off of uncollectible accounts). 3. The net amount of accounts receivable at the end of the month. Estimated cash receipts Gross accounts receivable 25% 60% 10% 5% 4. Recalculate requirements 1 and 2 under the assumption that estimated collections in the month of sale equal 60% and in the first month following the month of sale equal 25%. 1. 2. 3. Net accounts receivable 4a. Estimated cash receipts 4b. Gross accounts receivable
Transcribed Image Text:Papst Company is preparing its cash budget for the month of May. The following information is available concerning its accounts receivable (based on sales made to customers on open account): Actual credit sales for March Actual credit sales for April Estimated credit sales for May Estimated collections in the month of sale Estimated collections in the first month after the month of sale Estimated collections in the second month after the month of sale Estimated provision for bad debts (made in the month of sale) The firm writes off all uncollectible accounts at the end of the second month after the month of sale. Required: Determine for Papst Company for the month of May: $ 140,000 $ 174,000 $ 234,000 1. The estimated cash receipts from accounts receivable collections. 2. The gross amount of accounts receivable at the end of the month (after appropriate write-off of uncollectible accounts). 3. The net amount of accounts receivable at the end of the month. Estimated cash receipts Gross accounts receivable 25% 60% 10% 5% 4. Recalculate requirements 1 and 2 under the assumption that estimated collections in the month of sale equal 60% and in the first month following the month of sale equal 25%. 1. 2. 3. Net accounts receivable 4a. Estimated cash receipts 4b. Gross accounts receivable
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