Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 14, Problem 14E
Exercise 7-14A Determining amount to borrow and pro forma statement balances
Lois Bragg owns a small restaurant in Boston. Ms. Bragg provided her accountant with the following summary information regarding expectations for the month of June. The balance in
Required
- a. Compute the amount of funds Ms. Bragg needs to borrow for June.
- b. Determine the amount of interest expense the restaurant will report on the June pro forma income statement.
- c. What amount will the restaurant report as interest expense on the July pro forma income statement?
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Question 2
A. The Rilex and Chill Coffee Shop has requested a cash budget for August. After
examining the records of the company, you find the following:
1.
Cash balance on 1 August is RM43,280.
2. Actual sales for June and July are as follows:
June
RM
Cash sales
Credit sales
Total sales
10,200
26,100
36,300
July
RM
14,700
33,900
48,600
3. Credit sales are collected over three months: 30% in the month of sales, 40% in the
second month, and 25% in the third month. The customers who paid in the month of
sales are qualified for 3% discounts on the amount owed. While the sales collected in the
third month are subject to a 2% late fee, which is paid by those customers in addition to
what they owe. The remaining sales are uncollectible.
4. Inventory purchases average 80% of a month's total sales. Of those purchases, 60% are
paid for in the month of purchase. The remaining 40% is paid for in the following month.
5.
Salaries and wages total RM13,800 per month.
6. The company received interest…
Schedule of Cash Collections of Accounts Receivable
Furry Friends Supplies Inc., a pet wholesale supplier, was organized on
May 1. Projected sales for each of the first three months of operations are
as follows:
May
$156,000
June
175,000
July
180,000
All sales are on account. Seventy percent of sales are expected to be
collected in the month of the sale, 25% in the month following the sale,
and the remainder in the second month following the sale.
Prepare a schedule indicating cash collections from sales for May, June,
and July. Enter all amounts as positive numbers.
Furry Friends Supplies Inc.
Schedule of Collections from Sales
For the Three Months Ending July 31
May
June
July
May sales on account:
Collected in May
Collected in June
Collected in July
June sales on account:
Collected in June
Collected in July
July sales on account:
Collected in July
Total cash collected
b.
a.
Prepare a schedule of cash payments for Fein Company for
the month of August.
OBJECTIVE 3
C.
Exercise 9-45 Cash Budget
The owner of a building supply company has requested a
cash budget for June. After examining the records of the
company, you find the following:
Cash balance on June 1 is R7,360.
b. Actual sales for April and May are as follows:
d.
F.
a.
April
May
Cash sales
R180,000
Credit sales
to 00
R530,000
Total sales
R389,000
c. Credit sales are collected over a three-month period: R
40% in the month of sale, 30% in the second month, and
20% in the third month. The sales collected in the third
month are subject to a 2% late fee, which is paid by those
customers in addition to what they owe. The remaining
sales are uncollectible.
d. Inventory purchases average 64% of a month's total B
sales. Of those purchases, 20% are paid for in the month
of purchase. The remaining 80% are paid for in the
following month.
Salaries and wages total R117,500 per month, including a
R45,000…
Chapter 14 Solutions
Survey Of Accounting
Ch. 14 - Prob. 1QCh. 14 - Prob. 2QCh. 14 - 3.What are the three levels of planning? Explain...Ch. 14 - 4.What is the primary factor that distinguishes...Ch. 14 - 5.What is the advantage of using a perpetual...Ch. 14 - Prob. 6QCh. 14 - Prob. 7QCh. 14 - 8. Ken Shilov, manager of the marketing...Ch. 14 - Prob. 9QCh. 14 - 10.What is the normal starting point in developing...
Ch. 14 - 11. How does the level of inventory affect the...Ch. 14 - 12.What are the components of the cash budget?...Ch. 14 - 13.The primary reason for preparing a cash budget...Ch. 14 - 14.What information does the pro forma income...Ch. 14 - 15.How does the pro forma statement of cash flows...Ch. 14 - Exercise 7-1A Budget responsibility Teresa...Ch. 14 - Exercise 7-2A Preparing a sales budget Parliament...Ch. 14 - Prob. 3ECh. 14 - Exercise 7-4A Preparing sales budgets with...Ch. 14 - Exercise 7-5A Determining cash receipts from...Ch. 14 - Exercise 7-6A Using judgment in making a sales...Ch. 14 - Exercise 7-7A Preparing an inventory purchases...Ch. 14 - Exercise 7-8A Preparing a schedule of cash...Ch. 14 - Exercise 7-9A Determining the amount of expected...Ch. 14 - Exercise 7-10A Preparing inventory purchases...Ch. 14 - Exercise 7-11A Preparing a schedule of cash...Ch. 14 - Prob. 12ECh. 14 - Exercise 7-13A Preparing a cash budget The...Ch. 14 - Exercise 7-14A Determining amount to borrow and...Ch. 14 - Prob. 15ECh. 14 - Problem 7-16A Behavioral impact of budgeting...Ch. 14 - Prob. 17PCh. 14 - Problem 7-18A Preparing an inventory purchases...Ch. 14 - Prob. 19PCh. 14 - Problem 7-21A Preparing a cash budget Fayette...Ch. 14 - Prob. 21PCh. 14 - Problem 7-22A Preparing budgets with multiple...Ch. 14 - Problem 7-23A Preparing a master budget for retail...Ch. 14 - ATC 7-1 Business Applications Case Preparing and...Ch. 14 - ATC7-2 Group Assignment Master budget and pro...Ch. 14 - ATC 7-4 Writing Assignment Continuous budgeting...Ch. 14 - Ethical Dilemma Bad budget system or unethical...
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- Schedule of Cash Collections of Accounts Receivable Furry Friends Supplies Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows: May $280,000 330,000 June July 470,000 All sales are on account. 60 percent of sales are expected to be collected in the month of the sale, 29 % in the month following the sale, and the remainder in the second month following the sale. Prepare a schedule indicating cash collections from sales for May, June, and July. Furry Friends Supplies Inc. Schedule of Collections from Sales For the Three Months Ending May 31 July May June May sales on account Collected in May Collected in June Collected in July June sales on account Collected in June Collected in July July sales on account Collected in July Total cash collectedarrow_forwardSchedule of Cash Collections of Accounts Receivable Furry Friends Supplies Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows: May $170,000 June 220,000 July 290,000 All sales are on account. 57 percent of sales are expected to be collected in the month of the sale, 31% in the month following the sale, and the remainder in the second month following the sale. Prepare a schedule indicating cash collections from sales for May, June, and July.arrow_forwardSchedule of Cash Collections of Accounts Receivable Furry Friends Supplies Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows: May $150,000 June 200,000 July 290,000 All sales are on account. 59 percent of sales are expected to be collected in the month of the sale, 29% in the month following the sale, and the remainder in the second month following the sale. Prepare a schedule indicating cash collections from sales for May, June, and July. Furry Friends Supplies Inc. Schedule of Collections from Sales For the Three Months Ending May 31 May June July May sales on account: Collected in May fill in the blank 1 Collected in June fill in the blank 2 Collected in July fill in the blank 3 June sales on account: Collected in June fill in the blank 4 Collected in July fill in the blank 5 July sales on account: Collected in July…arrow_forward
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