Please do not give solution in image format thanku Grounded Gadgets' sales budget showsthe following expected total sales:Month SalesJanuary $120,000February $160,000March $140,000April $120,000The company expects 70% of its sales to beon account (credit sales). Credit sales arecollected as follows: 40% in the month ofsale, 57% in the month following the salewith the remainder being uncollectible andwritten off in the month following the sale.Required:a) Calculate budgeted accounts receivableat the end of each month from Februarythrough April.b) Calculate budgeted cash inflows fromcollection of receivables for each monthfrom February through April.

FebMarAprilSale Revenue160000140000120000Cash Sale=160000*30%=140000*30%=120000*30%Credit…

Answered: e following expected total sales: onth…

Business

Accounting

e following expected total sales: onth Sales

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 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...

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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?
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