The following budgeted information is collected for a merchandising company: • Budgeted sales (all on credit) for November, December, and January are $250,000, $220,000, and $200,000, respectively. Cash collections of sales are expected to be 75% in the month of sale and 23% in the month following the sale. • The remainder of the sales is expected to be uncollectible. · The cost of goods sold is always 65% of sales. · Each month's ending inventory equals 20% of next month's cost of goods sold. • 40% of each month's merchandise purchases are paid in the current month and the remainder is paid in the following month. • Monthly selling and administrative expenses that are paid in cash in the month incurred total $20,500. • Monthly depreciation expense is $20,000. • Dividends of $5,000 to be declared in December and paid in Janauary. Use the above information to answer the following FIVE questions. The expected cash collections from customers in December are:
The following budgeted information is collected for a merchandising company: • Budgeted sales (all on credit) for November, December, and January are $250,000, $220,000, and $200,000, respectively. Cash collections of sales are expected to be 75% in the month of sale and 23% in the month following the sale. • The remainder of the sales is expected to be uncollectible. · The cost of goods sold is always 65% of sales. · Each month's ending inventory equals 20% of next month's cost of goods sold. • 40% of each month's merchandise purchases are paid in the current month and the remainder is paid in the following month. • Monthly selling and administrative expenses that are paid in cash in the month incurred total $20,500. • Monthly depreciation expense is $20,000. • Dividends of $5,000 to be declared in December and paid in Janauary. Use the above information to answer the following FIVE questions. The expected cash collections from customers in December are:
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 72P: Cash Budget The controller of Feinberg Company is gathering data to prepare the cash budget for...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:The following budgeted information is collected for a merchandising company:
Budgeted sales (all on credit) for November, December, and January are $250,000, $220,000, and $200,000, respectively.
Cash collections of sales are expected to be 75% in the month of sale and 23% in the month following the sale.
- The remainder of the sales is expected to be uncollectible.
The cost of goods sold is always 65% of sales.
Each month's ending inventory equals 20% of next month's cost of goods sold.
40% of each month's merchandise purchases are paid in the current month and the remainder is paid in the following month.
Monthly selling and administrative expenses that are paid in cash in the month incurred total $20,500.
Monthly depreciation expense is $20,000.
- Dividends of $5,000 to be declared in December and paid in Janauary.
Use the above information to answer the following FIVE questions.
The expected cash collections from customers in December are:
O $250,000
O $227,500
O $220,000
O $222,500
The ending balance of Accounts Payable for December is:
O $140,400
O $56,160
O $84,240
O $95,160
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