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Graham Potato Company has projected sales of $12,600 in September, $15,500 in October, $22,600 in November, and $18,600 in December. Of the company's sales, 25 percent are paid for by cash and 75 percent are sold on credit. Experience shows that 40 percent of accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after. Determine collections for November and December. Also assume Graham's cash payments for November and December are $19,000 and $11,500, respectively. The beginning cash balance in November is $5,000, which is the desired minimum balance. a. Prepare a cash receipts schedule for November and December. Graham Potato Company Cash Receipts Schedule September October November December

Graham Potato Company has projected sales of $12,600 in September, $15,500 in October, $22,600 in November, and $18,600 in December. Of the company's sales, 25 percent are paid for by cash and 75 percent are sold on credit. Experience shows that 40 percent of accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after. Determine collections for November and December. Also assume Graham's cash payments for November and December are $19,000 and $11,500, respectively. The beginning cash balance in November is $5,000, which is the desired minimum balance. a. Prepare a cash receipts schedule for November and December. Graham Potato Company Cash Receipts Schedule September October November December

Cornerstones of Cost Management (Cornerstones Series)
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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Problem 4-24 (Algo) Cash budget [LO4-2] Graham Potato Company has projected sales of $12,600 in September, $15,500 in October, $22,600 in November, and $18,600 in December. Of the company's sales, 25 percent are paid for by cash and 75 percent are sold on credit. Experience shows that 40 percent of accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after. Determine collections for November and December. Also assume Graham's cash payments for November and December are $19,000 and $11,500, respectively. The beginning cash balance in November is $5,000, which is the desired minimum balance. a. Prepare a cash receipts schedule for November and December. Sales Credit sales Cash sales One month after sale Two months after sale Total cash receipts Graham Potato Company Cash Receipts Schedule September October November $ December 0 $ 0 b. Prepare a cash budget with borrowing needed or repayments for November and December. Note: Negative amounts should be indicated by a minus sign. Assume the November beginning loan balance is $0. Leave no cells blank be certain to enter O wherever required.
Transcribed Image Text:Problem 4-24 (Algo) Cash budget [LO4-2] Graham Potato Company has projected sales of $12,600 in September, $15,500 in October, $22,600 in November, and $18,600 in December. Of the company's sales, 25 percent are paid for by cash and 75 percent are sold on credit. Experience shows that 40 percent of accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after. Determine collections for November and December. Also assume Graham's cash payments for November and December are $19,000 and $11,500, respectively. The beginning cash balance in November is $5,000, which is the desired minimum balance. a. Prepare a cash receipts schedule for November and December. Sales Credit sales Cash sales One month after sale Two months after sale Total cash receipts Graham Potato Company Cash Receipts Schedule September October November $ December 0 $ 0 b. Prepare a cash budget with borrowing needed or repayments for November and December. Note: Negative amounts should be indicated by a minus sign. Assume the November beginning loan balance is $0. Leave no cells blank be certain to enter O wherever required.
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