Question 2View PoliciesCurrent Attempt in ProgressDrew Enterprises reports all its sales on credit, and pays operating costs in the month incurred. Estimated amounts forthe months of June through October are:August September OctoberJulyJune$310,000 $330,000 $300,000 $280,000 $260,000Budgeted salesBudgeted purchases $144,000 $120,000 $128,000 $132,000 $90,000. Customer amounts on account are collected 60% in the month of sale and 40% in the following month.. Cost of goods sold is 45% of sales.. Drew purchases and pays for merchandise 30% in the month of acquisition and 70% in the following month.How much cash is budgeted to be received during August?$312,000.O $318,000.O $291,000.$180,000.)hp19 4fn+insprt scdeletehomeend&76numbackspacelockPhomeHJK4enter

Budgeted cash receipts are a part of cash budgets that represents the amount of cash that is…

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Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter4: Internal Control And Cash

Section: Chapter Questions

Problem 54E: Exercise 4-54 Operating Cycle and Current Receivables a. Dither and Sly are attorneys-at-law who...

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Exercise 4-54 Operating Cycle and Current Receivables a. Dither and Sly are attorneys-at-law who specialize in federal income tax law. The): complete their typical case in 6 months or less and collect from the typical client within 1 additional month. b. Johnstons Market specializes in fresh meat and fish. All merchandise must be sold within one week of purchase. Almost all sales are for cash and any receivables are generally paid by the end of the following month. c. Mortondos is a womens clothing store specializing in high-style merchandise. Merchandise spends an average of 7 months on the rack following purchase. Most sales are on credit and the typical customer pays within 1 month of sale. d. Trees Inc. grows Christmas trees and sells them to various Christmas tree lots. Most sales are for cash. It takes 6 years to grow a tree. Required: For each of the businesses described above, indicate the length of the operating cycle.
Chipotle: Vertical analysis Chipotle Mexican Grill, Inc. is a quick-service restaurant providing a focused menu of burritos, tacos, and salads. Chipotles balance sheets for the end of two recent years are as follows (in thousands): Chipotle Mexican Grill, Inc Balance Sheets December 31 (in thousands) Year 2 Year 1 Assets Current assets Cash 419,465 323,203 Accounts receivable, net 34,839 24,016 Inventory 15,332 13,044 Other current assets 70,251 51,073 Investments 338592 254971 Total current assets 878,479 666,307 Property, plant, and equipment 1,106,984 963,238 Long-term investments 496,106 313,863 Other assets 64716 65872 Total assets 2,546,285 2,009,280 Liabilities and Stockholders Equity Current liabilities Accounts payable 69,613 59,022 Other current liabilities 176,097 140,206 Total current liabilities 245,710 199,228 Long-term liabilities 288,206 271,764 Total liabilities 533,916 470,992 Stockholders Equity Common stock 354 352 Additional paid-in capital 1,038,932 919,840 Retained earnings 1,722,271 1,276,897 Treasury stock (748,759) (660,421) Other adjustments (429) 1,620 Total stockholders equity 2,012,369 1,538,288 Total liabilities and stockholders equity 2,546,285 2,009,280 A. Prepare a vertical analysis of the two balance sheets. (Round percentages to one decimal place.) B. Interpret the vertical analysis with respect to the change in the percent of asset, liability, and stockholders equity components to total assets. (Treasury stock will be discussed in a later chapter and may be omitted from your analysis.)
Exercise 1-38 Identifying Current Assets and Liabilities Dunn Sporting Goods sells athletic clothing and footwear 10 retail customers. Dunns accountant indicates that the firms operating cycle averages 6 months. At December 31, 2019, Dunn has the following assets and liabilities: Prepaid rent in the amount of 58,500. Dunns rent is $500 per month. A $9,700 account payable due in 45 days. Inventory in the amount of $46,230. Dunn expects to sell $38,000 of the inventory within 3 months. The remainder will be placed in storage until September 2020. The items placed in storage should be sold by November 2020. An investment in marketable securities in the amount of $1,900. Dunn expects to sell $700 of the marketable securities in 6 months. The remainder are not expected to be sold until 2022. Cash in the amount of $1,050. An equipment loan in the amount of $60,000 due in March 2024. Interest of $4,500 is due in March 2020 ($3,750 of the interest relates to 2019. with the remainder relating to the first 3 months of 2020). An account receivable from a local university in the amount of $2,850. The university has promised to pay the full amount in 3 months. Store equipment at a cost of $9,200. Accumulated depreciation has been recorded on the store equipment in the amount of 51,250. Required: Prepare the current asset and current liability portions of Dunns December 31, 20191 balance-sheet. Compute Dunns working capital and current ratio at December 31, 2019. CONCEPTUAL CONNECTION As in investor or creditor. what do these ratios tell you about Dunns liquidity?
Cornerstone Exercise 3-12 Accrual- and Cash-Basis Revenue McDonald Music sells used CDs for S4.00 each. During the month of April, McDonald sold 7,650 CDs for cash and 13,220 CDs on credit. McDonalds cash collections in April included $30,600 for the CDs sold for cash, $12,800 for CDs sold on credit during the previous month, and $29,850 for CDs sold on credit during April. Required: Calculate the amount of revenue recognized in April under (1) cash-basis accounting and (2) accrual-basis accounting.

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