babyblue414
Apr 12, 2011, 04:28 PM
Sales budgeted:
360,000 for November
380,000 for December
350,000 for January
Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectable
The cost of goods sold is 65% of sales
The company purchases 60% of its merchandise in the month prior to the month of sale and 40$ in the month of sale. Payment is made in the month following the purchase
Other monthly expenses paid in cash are 21,900
Monthly depreciation is 20,000
Ignore taxes
October 31
Cash: 16,000
Accounts recievable 74,000
Inventory: 140,400
Property, plant, equipment (net of 500,000 accumulated depreciation) 1,066,000
Total assets: $1,296,400
Liabilities and stockholders equity
Accounts payable: 240,000
Common stock: 640,000
Retained earnings: 416,400
Total liabilities and stockholders equity: 1,296,400
a. prepare a schedule of expected cash collections for November and December
b. prepare a merchandis purchases budget for November and December
c. prepare a cash budget for November and December
THIS IS WHAT I HAVE... CAN SOMEONE TELL ME WHAT IM DOING WRONG? IT Doesn't LOOK RIGHT.
Schedule of expected cash collections
November December janurary
Accounts receivable, beg. Balance 74,000
November sales: $360,000 270000 72000
December sales: $380,000 285000 76000
Total cash collections $344,000 $357,000 $76,000
Merchandise purchases budget
November December Janurary
Budgeted cost of goods sold 234,000 247,000 227,500
ADD desired ending merch inventory 148200 136500
Total needs 382,200 383,500
LESS beginning merch inventory 140,400 148,200
Required purchases 241,800 235,300
CASH BUDGET
November December
Cash balance, beginning 16,000
Add collections from sales 344,000
Total cash available 360,000
Less disbursements
Other expenses 21,900 21,900
Inventory purchases 78,624
Total disbursements 100,524
Excess of cash over disbursements 259,476
360,000 for November
380,000 for December
350,000 for January
Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectable
The cost of goods sold is 65% of sales
The company purchases 60% of its merchandise in the month prior to the month of sale and 40$ in the month of sale. Payment is made in the month following the purchase
Other monthly expenses paid in cash are 21,900
Monthly depreciation is 20,000
Ignore taxes
October 31
Cash: 16,000
Accounts recievable 74,000
Inventory: 140,400
Property, plant, equipment (net of 500,000 accumulated depreciation) 1,066,000
Total assets: $1,296,400
Liabilities and stockholders equity
Accounts payable: 240,000
Common stock: 640,000
Retained earnings: 416,400
Total liabilities and stockholders equity: 1,296,400
a. prepare a schedule of expected cash collections for November and December
b. prepare a merchandis purchases budget for November and December
c. prepare a cash budget for November and December
THIS IS WHAT I HAVE... CAN SOMEONE TELL ME WHAT IM DOING WRONG? IT Doesn't LOOK RIGHT.
Schedule of expected cash collections
November December janurary
Accounts receivable, beg. Balance 74,000
November sales: $360,000 270000 72000
December sales: $380,000 285000 76000
Total cash collections $344,000 $357,000 $76,000
Merchandise purchases budget
November December Janurary
Budgeted cost of goods sold 234,000 247,000 227,500
ADD desired ending merch inventory 148200 136500
Total needs 382,200 383,500
LESS beginning merch inventory 140,400 148,200
Required purchases 241,800 235,300
CASH BUDGET
November December
Cash balance, beginning 16,000
Add collections from sales 344,000
Total cash available 360,000
Less disbursements
Other expenses 21,900 21,900
Inventory purchases 78,624
Total disbursements 100,524
Excess of cash over disbursements 259,476