Adams Company, which expects to start operations on January 1, 2018, will sell digital cameras in shopping malls. Adams has budgeted sales as indicated in the following table. The company expects a 12 percent increase in sales per month for February and March. The ratio of cash sales to sales on account will remain stable from January through March. Required a. Complete the sales budget by filling in the missing amounts. b. Determine the amount of sales revenue Adams will report on its first quarter pro forma income statement.
Q: Gibson Company, which expects to start operations on January 1, year 2, will sell digital cameras in…
A: Here in this question, we are required to prepare sales budget and need to determine how much…
Q: Perez Company, which expects to start operations on January 1, year 2, will sell digital cameras in…
A: As sales will increase by 14% per month, both cash sales and credit sales will be increased.
Q: Jordan Company, which expects to start operations on January 1, year 2, will sell digital cameras in…
A: A budget is an estimation of expected revenue and expenses on the basis of previous experience. It…
Q: You are working as a financial analyst for XYZ Co. , and you prepared the following sales and cash…
A: A cash budget is prepared to keep the track of available funds and where the same can be utilized to…
Q: Use the information below for Nuthatch Corporation to answer the question that follow. Nuthatch…
A: Collection of credit sales depend on the entity's policies. Estimation of collection of credit sales…
Q: Hunt Chemicals is preparing a cash budget for June and July 2019. At the end of July 2019, the…
A: Hunt Chemical Cash Budget June (Pound) July (Pound) Opening Bank Balance (A) 17500 25550…
Q: Nestee controller for Mactan Relaters has assembled the following data to assist in the preparation…
A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %…
Q: ABC Company is preparing its cash budget for the next month. The accounts receivables at the…
A: The Budget means a forecast which is prepared at the beginning of the period in order to identify…
Q: a. At $37 each, unit sales are 5,000 and 6,000 for March and April, respectively. Total sales are…
A: Cash Budget: In the business world, a cash budget is an estimate of a company's cash flows over a…
Q: Justin Company's budget includes the following credit sales for the current year: September,…
A: Answer: $48,810
Q: Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has…
A: Cash Budgeting : A Cash Budget is an estimation of expected receipts of cash and also expected…
Q: The LaGrange Company had the following budgeted sales for the first half of the current year: Credit…
A: Budgeted Accounts receivable balance on a particular date means the budgeted uncollected sales of…
Q: Nizwa Pharmacy is developing its fourth-quarter monthly cash budget for 2021. On nvestigation, the…
A: This question deals with the concept of cash budget. Cash collection is a part of cash budget and…
Q: XYZ company is preparing its cash budget for the first quarter of. the year. It has $10,000 in cash…
A: Budgeted total cash payment = Inventory purchase + other operating expenses - depreciation = $25,000…
Q: Nestee controller for Mactan Relaters has assembled the following data to assist in the preparation…
A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %…
Q: CC expects sales for January, February, and March to be $420,000, $480,000, and $500,000,…
A: Budget means the expected value of future. Budget is not affected by the actual value as it is…
Q: Matthew Young has been working on Sheffield Paints' cash budget for the coming year. Based on his…
A: A cash budget is prepared to estimate the cash flows of a business during a specific period of time.…
Q: MORGAN Merchandising is preparing its Sales Budget for the 3rd Quarter of 2020 based on a budgeted…
A: The sales budget: The sales budget gives an estimate of the number of units expected to be sold and…
Q: Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has…
A: Given, Loan is taken at the beginning of the Quarter and paid at the end of the Quarter.
Q: MORGAN Merchandising is preparing its Sales Budget for the 3rd Quarter of 2020 based on a budgeted…
A: Budgeted sales revenue means the estimate of sales revenue for a future period.
Q: Nestee controller for Mactan Relaters has assembled the following data to assist in the preparation…
A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %…
Q: ONas Corporation is preparing its cash budget for September. The budgeted beginning cash balance is…
A: Cash budget is one of the important budget that is being prepared in business in order to show…
Q: Tyler Corp has the following budgeted sales for the first 4 months of next year: January $80,000…
A: Amount collected from December sales in the month of January = $132,000 × 30%40% = $99,000
Q: The company is in the process of preparing a budget for May and has assembled the following data: a.…
A: The question is based on the concept of Financial Accounting.
Q: Big City Manufacturing (BCM) is preparing its cash budget and expects to have sales of $450,000 in…
A: cash receipt in March from January sales = January sales x 35% cash receipt in March from February…
Q: PIOLO COMPANY is currently preparing its cash budget for next month and has gathered the following…
A: Beginning cash balance + Expected cash receipts - Expected cash disbursements = Ending cash balance
Q: The Hamdan Accounting Associates are preparing their cash budget for the four months ending April…
A: Solution: Introduction: Cash budget displays the total cash inflows against cash disbursements that…
Q: The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for the next…
A: Cash budget is a budget that is prepared to estimate the cash inflows and cash outflows for a…
Q: The following various elements relate to Whitfield, Inc.'s cash budget for April of the current…
A: The cash collection schedule is prepared to record the estimated cash collection during the period…
Q: Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the…
A: Cash collections refer to the amount of cash collected from the customers on sales and from the…
Q: Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has…
A: Cash Budget - It is an estimation of cashflow of a business for specific period of time. It shows…
Q: Nestee controller for Mactan Relaters has assembled the following data to assist in the preparation…
A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %…
Q: Lucky Food Stores wishes to prepare a cash budget for the month of April, 2022. Total Sales for…
A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %…
Q: XYZ company is preparing its cash budget for the first quarter of the year. It has $10,000 in cash…
A: The cash budget is prepared to project the cash inflows and cash outflows for a particular period.
Q: You are working as a financial analyst for XYZ Co. , and you prepared the following sales and cash…
A: Cash budget helps the management in identifying future surplus or deficit of cash by estimating cash…
Q: Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the…
A: Formula: Cash sales = Total sales x cash sales percentage Multiplying total sales with cash sales…
Q: Major Landscaping Company is preparing its budget for the first quarter of 2017. The next step in…
A: Given the information, Collection and Payment Schedule is shown in the next step along with the…
Q: Bagel Company is preparing its cash budget for the upcoming month. The beginning cash balance for…
A: Cash budget means the statement which shows the expected cash available for distribution including…
Q: Anderson Manufacturing Inc., aims to prepare a cash budget for September 2020. The cash balance at…
A: Cash Budget is the forecast of cash inflows and outflows for an entity during a specific period of…
Q: James Smith has been working on Crane Paints' cash budget for the coming year. Based on his…
A: Interest = Borrowing amount * Interest rate * period
Q: Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the…
A: The budget is prepared to find net cash requirements for the future.
Q: The Robbins Company is preparing its cash payments budget. The following items relate to cash…
A: SOLUTION- BUDGET- It is the Financial Plan for the particular period. it is the estimation of…
Q: Lucky Food Stores wishes to prepare a cash budget for the month of April, 2022. Total Sales for…
A: Cash collections in April from April sales = April sales x 80% Cash collections in April from March…
Q: The Hamdan Accounting Associates are preparing their cash budget for the four months ending April…
A: The cash budget shows the cash inflows and outflows during the year. These cash budgets help the…
Q: Franklin Company, which expects to start operations on January 1, year 2, will sell digital cameras…
A: Sales Budget :— A sales budget is a financial plan that estimates a company's total revenue in a…
Q: Perez Company, which expects to start operations on January 1, 2018, will sell digital cameras in…
A: Given: Cash Sales for January $46000 Credit sales for January $116000 12% in sales per month for…
Q: Fanning Company, which expects to start operations on January 1, year 2, will sell digital cameras…
A: Total sales revenue for first quarter = Total budgeted sales revenue for January,February and…
Q: The controller of Shoe Mart Inc. asks you to prepare a monthly cash budget for the next three…
A: Budgeting is an important part of the business process. Without budgeting a business cannot track…
Having an issue with this problem. Not sure if im roundign wrong or.
Thank you
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2019 and 2020: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2019. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal, and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.The sales department of Macro Manufacturing Co. has forecast sales for its single product to be 20,000 units for June, with three-quarters of the sales expected in the East region and one-fourth in the West region. The budgeted selling price is 25 per unit. The desired ending inventory on June 30 is 2,000 units, and the expected beginning inventory on June 1 is 3,000 units. Prepare the following: a. A sales budget for June. b. A production budget for June.The data shown were obtained from the financial records of Italian Exports, Inc., for March: Sales are expected to increase each month by 10%. Prepare a budgeted income statement.
- The following data were obtained from the financial records of Sonicbrush, Inc., for March: Sales are expected to increase each month by 15%. Prepare a budgeted income statement.Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the follow sales: In Shalimars experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are 4,900,000 and for the fourth quarter of the current year are 6,850,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. 2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. 3. What if the recession led Shalimars top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.Cash budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent 50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of 40,000, marketable securities of 75,000, and accounts receivable of 300,000 (60,000 from July sales and 240,000 from August sales). Sales on account for July and August were 200,000 and 240,000, respectively. Current liabilities as of September 1 include 40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 55,000 will be made in October. Bridgeports regular quarterly dividend of 25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of 50,000. Instructions Prepare a monthly cash budget and supporting schedules for September, October, and November. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
- A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and the remainder are credit sales. The company finds that typically 10 percent of a months credit sales are paid in the month of sale, 70 percent are paid the next month, and 15 percent are paid in the second month after sale. Expected cash receipts in July are budgeted at what amount? a. 114,520 b. 143,150 c. 145,720 d. 156,000Cash budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the sale and the remainder the following month (second month after sale). Depreciation, insurance, and property tax expense represent 12,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in February, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of June 1 include cash of 42,000, marketable securities of 25,000, and accounts receivable of 198,000 (150,000 from May sales and 48,000 from April sales). Sales on account in April and May were 120,000 and 150,000, respectively. Current liabilities as of June 1 include 13,000 of accounts payable incurred in May for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 24,000 will be made in July. Mercury Shoes regular quarterly dividend of 15,000 is expected to be declared in July and paid in August. Management desires to maintain a minimum cash balance of 40,000. Instructions Prepare a monthly cash budget and supporting schedules for June, July, and August. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?Cash Budget The controller of Feinberg Company is gathering data to prepare the cash budget for July. He plans to develop the budget from the following information: a. Of all sales, 40% are cash sales. b. Of credit sales, 45% are collected within the month of sale. Half of the credit sales collected within the month receive a 2% cash discount (for accounts paid within 10 days). Thirty percent of credit sales are collected in the following month; remaining credit sales are collected the month thereafter. There are virtually no bad debts. c. Sales for the second two quarters of the year follow. (Note: The first 3 months are actual sales, and the last 3 months are estimated sales.) d. The company sells all that it produces each month. The cost of raw materials equals 26% of each sales dollar. The company requires a monthly ending inventory of raw materials equal to the coming months production requirements. Of raw materials purchases, 50% is paid for in the month of purchase. The remaining 50% is paid for in the following month. e. Wages total 105,000 each month and are paid in the month incurred. f. Budgeted monthly operating expenses total 376,000, of which 45,000 is depreciation and 6,000 is expiration of prepaid insurance (the annual premium of 72,000 is paid on January 1). g. Dividends of 130,000, declared on June 30, will be paid on July 15. h. Old equipment will be sold for 25,200 on July 4. i. On July 13, new equipment will be purchased for 173,000. j. The company maintains a minimum cash balance of 20,000. k. The cash balance on July 1 is 27,000. Required: Prepare a cash budget for July. Give a supporting schedule that details the cash collections from sales.
- Pilsner Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account: Pilsner typically pays 25% on account in the month of billing and 75% the next month. Required: 1. How much cash is required for payments on account in May? 2. How much cash is expected for payments on account in June?Carmichael Corporation is in the process of preparing next years budget. The pro forma income statement for the current year is as follows: Required: 1. What is the break-even sales revenue (rounded to the nearest dollar) for Carmichael Corporation for the current year? 2. For the coming year, the management of Carmichael Corporation anticipates an 8 percent increase in variable costs and a 60,000 increase in fixed expenses. What is the break-even point in dollars for next year? (CMA adapted)Digital Solutions Inc. uses flexible budgets that are based on the following data: Prepare a flexible selling and administrative expenses budget for October for sales volumes of 500,000, 750,000, and 1,000,000.