The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 50 percent of the budgeted sales in units for the next month. A 2 percent cash discount on sales is allowed if payment is made during the month of sale. Experience indicates that 50 percent of the billings will be collected during the month of sale, 40 percent in the following month, 8 percent in the second following month, and 2 percent will be uncollectible. Total budgeted selling and administrative expenses (excluding bad debts) for the fiscal year are estimated at $180,000, of which one-half is fixed expense (inclusive of a $18,000 annual depreciation charge). Fixed expenses are incurred evenly during the year. The other selling and administrative expenses vary with sales. Expenses are paid during the month incurred. (Round your answers to the nearest whole number.) Part A Part B Part C Part D (b) Prepare a schedule of estimated July cash payments for purchases. For this, perform your calculation using units rounding up to the nearest whole unit. Then convert to dollars for your answer. Peoria Supply Company Schedule of Cash Payments for Purchases For the Month of July Current month's purchases Beginning accounts payable Total cash payments $ $ Check
The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 50 percent of the budgeted sales in units for the next month. A 2 percent cash discount on sales is allowed if payment is made during the month of sale. Experience indicates that 50 percent of the billings will be collected during the month of sale, 40 percent in the following month, 8 percent in the second following month, and 2 percent will be uncollectible. Total budgeted selling and administrative expenses (excluding bad debts) for the fiscal year are estimated at $180,000, of which one-half is fixed expense (inclusive of a $18,000 annual depreciation charge). Fixed expenses are incurred evenly during the year. The other selling and administrative expenses vary with sales. Expenses are paid during the month incurred. (Round your answers to the nearest whole number.) Part A Part B Part C Part D (b) Prepare a schedule of estimated July cash payments for purchases. For this, perform your calculation using units rounding up to the nearest whole unit. Then convert to dollars for your answer. Peoria Supply Company Schedule of Cash Payments for Purchases For the Month of July Current month's purchases Beginning accounts payable Total cash payments $ $ Check
Chapter15: Managing Short-term Assets
Section: Chapter Questions
Problem 1PROB
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Transcribed Image Text:The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 50 percent of the budgeted sales
in units for the next month. A 2 percent cash discount on sales is allowed if payment is made during the month of sale. Experience indicates that 50 percent of the billings will be
collected during the month of sale, 40 percent in the following month, 8 percent in the second following month, and 2 percent will be uncollectible. Total budgeted selling and
administrative expenses (excluding bad debts) for the fiscal year are estimated at $180,000, of which one-half is fixed expense (inclusive of a $18,000 annual depreciation charge). Fixed
expenses are incurred evenly during the year. The other selling and administrative expenses vary with sales. Expenses are paid during the month incurred. (Round your answers to the
nearest whole number.)
Part A
Part B
Part C
Part D
(b) Prepare a schedule of estimated July cash payments for purchases. For this, perform your calculation using units rounding up to the nearest whole unit. Then convert to dollars for
your answer.
Peoria Supply Company
Schedule of Cash Payments for Purchases
For the Month of July
Current month's purchases
Beginning accounts payable
Total cash payments
$
$
Check
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