B. Mahmoud Repair Company is preparing its budget for the first quarter of 2021. The next step in the budgeting process is to prepare a cash receipts schedule and a cash payments schedule. To that end the following information has been collected. Clients usually pay 60% of their fee in the month that service is provided, 30% the month after, and 10% the second month after receiving service. Actual service revenue for 2016 and expected service revenues for 2021 are: November 2020, $120,00%3; December 2020, $110,000; January 2021, $140,000; February 2021, $160,000; March 2021, $170,000. Purchases on landscaping supplies (direct materials) are paid 40% in the month of purchase and 60% the following month. Actual purchases for 2020 and expected purchases for 2021 are: December 2020, $21,000; January 2021, $20,000; February 2021, $22,000; March 2021, $27,000. Instructions (a) Prepare the following schedules for each month in the first quarter of 2021 and for the quarter in total: (1) Expected collections from clients. (2) Expected payments for landscaping supplies. (b) Determine the following balances on March 31, 2021: (1) Accounts receivable. (2) Accounts payable

B. Mahmoud Repair Company is preparing its budget for the first quarter of 2021. The next step in the budgeting process is to prepare a cash receipts schedule and a cash payments schedule. To that end the following information has been collected. Clients usually pay 60% of their fee in the month that service is provided, 30% the month after, and 10% the second month after receiving service. Actual service revenue for 2016 and expected service revenues for 2021 are: November 2020, $120,00%3; December 2020, $110,000; January 2021, $140,000; February 2021, $160,000; March 2021, $170,000. Purchases on landscaping supplies (direct materials) are paid 40% in the month of purchase and 60% the following month. Actual purchases for 2020 and expected purchases for 2021 are: December 2020, $21,000; January 2021, $20,000; February 2021, $22,000; March 2021, $27,000. Instructions (a) Prepare the following schedules for each month in the first quarter of 2021 and for the quarter in total: (1) Expected collections from clients. (2) Expected payments for landscaping supplies. (b) Determine the following balances on March 31, 2021: (1) Accounts receivable. (2) Accounts payable

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 11CE: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted...

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Echo Amplifiers prepared the following sales budget for the first quarter of 2018: It also has this additional information related to its expenses: Prepare a sales and administrative expense budget for each month in the quarter ending March 31, 2018.
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One Device makes universal remote controls and expects to sell 500 units in January, 800 in February, 450 in March, 550 in April, and 600 in May. The required ending inventory is 20% of the next months sales. Prepare a production budget for the first four months of the year.
All Temps has a policy of always paying within the discount period, and each of its suppliers provides a discount of 2% if paid within 10 days of purchase. Because of the purchase policy, 80% of its payments are made in the month of purchase and 20% are made the following month. The direct materials budget provides for purchases of $23,812 in February, $23,127 in March, $21,836 in April, and $28,173 in May.What is the balance in accounts payable for April 30, and May 31?
Palmgren Company produces consumer products. The sales budget for four months of the year is presented below. Company policy requires that ending inventories for each month be 25 percent of next months sales. At the beginning of July, the beginning inventory of consumer products met that policy. Required: Prepare a production budget for the third quarter of the year. Show the number of units that should be produced each month as well as for the quarter in total.
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. 156,000
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