REVEL for Horngren's Cost Accounting: A Managerial Emphasis -- Access Card (16th Edition) (What's New in Accounting)
16th Edition
ISBN: 9780134789705
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 6, Problem 6.41P
Assume the following: Animal Gear (AG) does not make any sales on credit. AG sells only to the public and accepts cash and credit cards; 90% of its sales are to customers using credit cards, for which AG gets the cash right away, less a 2% transaction fee.
Purchases of materials are on account. AG pays for half the purchases in the period of the purchase and the other half in the following period. At the end of March, AG owes suppliers $8,000.
AG plans to replace a machine in April at a net cash cost of $13,000.
Labor, other
AG currently has a $2,000 loan at an annual interest rate of 12%. The interest is paid at the end of each month. If AG has more than $7,000 cash at the end of April it will pay back the loan. AG owes $5,000 in income taxes that need to be remitted in April. AG has cash of $5,900 on hand at the end of March.
- 1. Prepare a cash budget for April for Animal Gear.
- 2. Why do Animal Gear’s managers prepare a cash budget in addition to the revenue, expenses, and operating income budget?
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Ewing Company is preparing a cash budget for September. The following information on accounts receivable collections is available from past collection experience.
Percent of current month’s sales collected this month
20
%
Percent of prior month’s sales collected this month
57
Percent of sales two months prior to current month collected this month
12
Percent of sales three months prior to current month collected this month
8
The remaining 3 percent is not collected and is written off as bad debts. Credit sales to date are as follows.
September—estimated
$
280,000
August
252,000
July
240,000
June
286,000
Required:
What are the estimated cash receipts from accounts receivable collections in September?
Zinc Corporation is developing its cash budget for this month. Each month, the firm manufactures and sells $15,000 of products, and it pays $10,000 for wages, taxes, cost of goods sold, and other operating expenses. Zinc has nothing in its checking account even though its target cash balance is $8,000. What amount will Zinc show on the “bottom line” of its cash budget for this month? That is, what will be Zinc's cash position?
Group of answer choices
Zinc has surplus cash of $6,000.
Zinc has a cash shortfall of $23,000.
Zinc has surplus cash of $8,000.
Zinc has a cash shortfall of $3,000.
Zinc has surplus cash of $20,000.
All sales at Alaska Company are on credit. The company is preparing a cash budget for November. The following information on accounts receivable collections is available from customer payment history:
Percent of current month’s sales collected this month
20%
Percent of prior month’s sales collected this month
62
Percent of sales two months prior to current month collected this month
10
Percent of sales three months prior to current month collected this month
5
The remaining 3 percent is not collected and is written off as bad debts. Sales to date are as follows:
November (estimated)
$ 270,000
October
610,000
September
240,000
August
680,000
Required:
What are the estimated cash receipts from accounts receivable collections in November?
Chapter 6 Solutions
REVEL for Horngren's Cost Accounting: A Managerial Emphasis -- Access Card (16th Edition) (What's New in Accounting)
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Ch. 6 - Define Kaizen budgeting.Ch. 6 - Prob. 6.12QCh. 6 - Explain how the choice of the type of...Ch. 6 - What are some additional considerations that arise...Ch. 6 - Prob. 6.15QCh. 6 - Master budget. Which of the following statements...Ch. 6 - Operating and financial budgets. Which of the...Ch. 6 - Production budget. Superior Industries sales...Ch. 6 - Responsibility centers. Elmhurst Corporation is...Ch. 6 - Cash budget. Mary Jacobs, the controller of the...Ch. 6 - Sales budget, service setting. In 2017 Hart Sons,...Ch. 6 - Sales and production budget. The Coby Company...Ch. 6 - Direct material budget. Dawson Co. produces wine....Ch. 6 - Material purchases budget. The McGrath Company has...Ch. 6 - Revenues, production, and purchases budgets. The...Ch. 6 - Revenues and production budget. Saphire, Inc.,...Ch. 6 - Budgeting; direct material usage, manufacturing...Ch. 6 - Budgeting, service company. Ever Clean Company...Ch. 6 - Budgets for production and direct manufacturing...Ch. 6 - Activity-based budgeting. The Jerico store of...Ch. 6 - Kaizen approach to activity-based budgeting...Ch. 6 - Responsibility and controllability. Consider each...Ch. 6 - Responsibility, controllability, and stretch...Ch. 6 - Cash flow analysis, sensitivity analysis....Ch. 6 - Budget schedules for a manufacturer. Hale...Ch. 6 - Budgeted costs, Kaizen improvements environmental...Ch. 6 - Revenue and production budgets. (CPA, adapted) The...Ch. 6 - Budgeted income statement. (CMA, adapted) Smart...Ch. 6 - Prob. 6.39PCh. 6 - Comprehensive problem with ABC costing. Animal...Ch. 6 - Cash budget (continuation of 6-40). Refer to the...Ch. 6 - Comprehensive operating budget. Skulas, Inc.,...Ch. 6 - Cash budgeting, budgeted balance sheet....Ch. 6 - Comprehensive problem; ABC manufacturing, two...Ch. 6 - Cash budget. (Continuation of 6-44) (Appendix)...Ch. 6 - Budgeting and ethics. Jayzee Company manufactures...Ch. 6 - Kaizen budgeting for carbon emissions. Apex...Ch. 6 - Comprehensive budgeting problem; activity-based...
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