Loose-leaf for Managerial Accounting - Standalone book
15th Edition
ISBN: 9780077522940
Author: Ray H Garrison, Eric Noreen, Peter C. Brewer Professor
Publisher: McGraw-Hill Education
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Schedule of expected cash collections
Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak
sales occur in May of each year. These peak sales are shown in the company's sales
budget for the second quarter given below:
April
$300,000
May
June
Total
eted Sales
$500,000
$200,000
$1,000,000
From past experience, the company has learned that 15% of the company's sales are for
cash. Credit sales are collected as follows: 20% are collected in the month of sale,
another 70% are collected in the month following the sale, and the remaining 10% are
collected in the second month following the sale. Bad debts are negligible and can be
ignored. February sales totaled $230,000, and March sales totaled $260,000.
A. Prepare a schedule of expected cash collections from sales, by month and in total,
for the second quarter.
B. Assume that the company will prepare a budgeted balance sheet as of June 30.
Compute the accounts receivable as of that date.
Problem 7-17A (Algo) Preparing a sales budget and schedule of cash receipts LO 7-2
Thornton Pointers Corporation expects to begin operations on January 1, year 1, it will operate as a specialty sales company that sells
laser pointers over the Internet. Thornton expects sales in January year 1 to total $400,000 and to increase 20 percent per month in
February and March. All sales are on account. Thornton expects to collect 66 percent of accounts receivable in the month of sale, 24
percent in the month following the sale, and 10 percent in the second month following the sale.
Required
a. Prepare a sales budget for the first quarter of year 1.
b. Determine the amount of sales revenue Thornton will report on the year 1 first quarterly pro forma income statement.
c. Prepare a cash receipts schedule for the first quarter of year 1.
d. Determine the amount of accounts receivable as of March 31, year 1.
Complete this question by entering your answers in the tabs below.
Required A Required B…
Exercises
Exercise 1 (Schedule of Expectęd Cash Collections)
Peak sales for Mideast Products, Inc., occur in August. The company's sales
budget for the third quarter showing these peak sales is given below:
July
P600,000
September
P500,000
Total
August
P900,000
Budgeted sales
P2,000,000
From past experience, the company has learned that 20% of a month's sales
are collected in the month of sale, that another 70% is collected in the month
following sale, and that the remaining 10% is collected in the second month
following sale. Bad debts are negligible and can be ignored. May sales totaled
P430,000 and June sales totaled P540,000.
Required:
1. Prepare a schedule of expected cash collections from sales, by month and
in total, for the third quarter.
2. Assume that the company will prepare a budgeted statement of financial
position as of September 30. Compute the accounts receivable as of that
date.
Chapter 8 Solutions
Loose-leaf for Managerial Accounting - Standalone book
Ch. 8 - Prob. 1QCh. 8 - Prob. 2QCh. 8 - Prob. 3QCh. 8 - 8-4 What is a master budget? Briefly describe its...Ch. 8 - 8—5 Why is the sales forecast the starting point...Ch. 8 - Prob. 6QCh. 8 - 8-7 Why is it a good idea to create a ‘"Budgeting...Ch. 8 - 8-8 What is a self-imposed budget? What are the...Ch. 8 - Prob. 9QCh. 8 - Prob. 10Q
Ch. 8 -
The Excel worksheet form that appears below is to...Ch. 8 - Prob. 2AECh. 8 - Prob. 1F15Ch. 8 - Prob. 2F15Ch. 8 - Prob. 3F15Ch. 8 - Prob. 4F15Ch. 8 - Morganton Company makes one product and it...Ch. 8 - Morganton Company makes one product and it...Ch. 8 - Morganton Company makes one product and it...Ch. 8 - Morganton Company makes one product and it...Ch. 8 - Morganton Company makes one product and it...Ch. 8 - Morganton Company makes one product and it...Ch. 8 - Prob. 11F15Ch. 8 - Prob. 12F15Ch. 8 - Prob. 13F15Ch. 8 - Prob. 14F15Ch. 8 - Prob. 15F15Ch. 8 - EXERCISE 8-1 Schedule of Expected Cash Collections...Ch. 8 - Prob. 2ECh. 8 - EXERCISE 8-3 Direct Materials Budget LOW Three...Ch. 8 -
EXERCISE 8-4 Direct Labor Budget...Ch. 8 -
EXERCISE 8-5 Manufacturing Overhead Budget...Ch. 8 -
...Ch. 8 -
The company's beginning cash balance for the...Ch. 8 - EXERCISE 8-8 Budgeted Income Statement LO8-9 Gig...Ch. 8 - EXERCISE 8-9 Budgeted Balance Sheet LO8-10 The...Ch. 8 -
EXERCISE 8-10 Production and Direct Materials...Ch. 8 - EXERCISE 8-11 Cash Budget Analysis LOB-8 A cash...Ch. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 -
EXERCISE 8-14 Sales and Production Budgets LO8-2,...Ch. 8 - EXERCISE 8-15 Direct Labor and Manufacturing...Ch. 8 - EXERCISE 8-16 Direct Materials and Direct Labor...Ch. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - PROBLEM 8-19 Cash Budget: Income Statement:...Ch. 8 -
PROBLEM 8-20 Cash Budget; Income Statement;...Ch. 8 - Prob. 21PCh. 8 -
PROBLEM 8-22 Evaluating a Company’s Budget...Ch. 8 - PROBLEM 8—23 schedule or Expected cash...Ch. 8 - PROBLEM 8-24 Cash Budget with Supporting Schedules...Ch. 8 - PROBLEM 8-25 Schedule of Expected Cash...Ch. 8 - PROBLEM 8-26 Behavioral Aspects of Budgeting:...Ch. 8 - (
$
55,000
$ 55, 000
...Ch. 8 -
PROBLEM 8-28 Cash Budget with Supporting...Ch. 8 - PROBLEM 8-29 Completing a Master Budget LO8-2,...Ch. 8 - PROBLEM 8-30 Integration of the Sales, Production,...Ch. 8 - Prob. 31C
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- Exercise 8-1 Schedule of Expected Cash Collections [LO8-2] Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown in the company's sales budget for the second quarter given below: April $340,000 May $540,000 Total $1,050,000 June Budgeted sales (all on account) $170,000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 75% are collected in the month following sale, and the remaining 5% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $270,000, and March sales totaled $300,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. - 2. What is the accounts receivable balance on June 30th? Complete this question by entering your answers in the tabs below.arrow_forwardQuestion 2 A. The Rilex and Chill Coffee Shop has requested a cash budget for August. After examining the records of the company, you find the following: 1. Cash balance on 1 August is RM43,280. 2. Actual sales for June and July are as follows: June RM Cash sales Credit sales Total sales 10,200 26,100 36,300 July RM 14,700 33,900 48,600 3. Credit sales are collected over three months: 30% in the month of sales, 40% in the second month, and 25% in the third month. The customers who paid in the month of sales are qualified for 3% discounts on the amount owed. While the sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. 4. Inventory purchases average 80% of a month's total sales. Of those purchases, 60% are paid for in the month of purchase. The remaining 40% is paid for in the following month. 5. Salaries and wages total RM13,800 per month. 6. The company received interest…arrow_forwardCh. 8 Expected Cash Disbursements Question Please solve and explain the following problem with formula typed out. Pastoria Enterprises has scheduled raw materials purchases of $100,000 in Janurary $130,000 in February and $150,000 in March. The company pays for 75% of its purchases in the month of purchases and 25% in the month after purchase. What is the expected cash disbursement for the month of February?arrow_forward
- Exercise 1 (Schedule of expected Cash Collection) Peak sales for Mideast Products, Inc., occur in August. The company's sales budget for the third quarter showing these peak sales is given below: July August September Total Budgeted sales ................ P600,000 P900,000 P500,000 P2,000.000 From past experience, the company has learned that 20% of a month’s sales are collected in the month of sale, that another 70% is collected in the month following sale, and that the remaining 10% is collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled P430,000 and June sales totaled P540,000. Required: Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. Assume that the company will prepare a budgeted statement of financial position as of September 30. Compute the accounts receivable as of that date.arrow_forwardQuestion 2: Avril Company makes collections on sales according to the below schedule. The Treasury Manager conducts an analysis of the cash collection and determines that cash collection target for March should be $150,000. Evaluate whether the collection target for March is correct and summarize your recommendations. Month Expected Sales January $ 100,000 February $ 120,000 March $ 110,000 30% in the month of sale 60% in the month following sale 10% in the second month following salearrow_forwardExercise 2 (Schedule of Expected Cash Collections) Peak sales for General Products, Inc. occur in September. The company's sales budget for the third quarter showing these peak sales is given below, July Budgeted sales... P885,500 August P1,018,000 PI,222,000 P3,125,500 September Total From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, that another 70% is collected in the month following sale, and that the remaining 10% is collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled P700,000 and June sales totaled P770,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. 2. Assume that the company will prepare a budgeted balance sheet of September 30. Compute the accounts receivable as of the date.arrow_forward
- III. EXERCISES Exercise 1 (Schedule of expected Cash Collection) Peak sales for Mideast Products, Inc., occur in August. The company's sales budget for the third quarter showing these peak sales is given below: July August September Total Budgeted sales P600,000 P900,000 P2,000,000 P2,000.000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, that another 70% is collected in the month following sale, and that the remaining 10% is collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled P430,000 and June sales totaled P540,000. Required: 1. Prepare a schedule of expected cash collections from sales, bymonth and in total, for the thirdquarter. 2. Assume that the company will prepare a budgeted statement of financial position as of September 30. Compute the accounts receivable as ofthat date.arrow_forwardQuestion 10 View Policies Current Attempt in Progress The following credit sales are budgeted by Waterway Industries: t $174000 January 250000 February 390000 March 280000 April The company's past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of April is O $336920. O $294000. O $280800. O $274000. hp holl 12 44 ins prt sc delete home & 6 7 backspace lock P C H K L ntarrow_forwardExercise 8-1 (Algo) Schedule of Expected Cash Collections [LO8-2] Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown in the company's sales budget for the second quarter given below: Required 1 Required 2 Budgeted sales (all on account) From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 15% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $420,000, and March sales totaled $450,000. Complete this question by entering your answers in the tabs below. April $ 490,000 Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. 2. What is the accounts receivable balance on June 30th? February sales March sales April sales May sales June sales Total cash…arrow_forward
- Exercise 1 (Schedule of Expected Cash Collections) Peak sales for Mideast Products, Inc., occur in August. The company's sales budget for the third quarter showing these peak sales is given below: July P600,000 August P900,000 Total September P2,000,000 Budgeted sales P2,000,000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, that another 70% is collected in the month following sale, and that the remaining 10% is collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled P430,000 and June sales totaled P540,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. 2. Assume that the company will prepare a budgeted statement of financial position as of September 30. Compute the accounts receivable as of that date.arrow_forwardQuestion 8 View Policies Current Attempt in Progress Waterway Industries reported the following information for 2016: rt October November December Budgeted sales $1330000 $1230000 $1510000 . All sales are on credit. . Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much cash will Waterway receive in November? O $1370000 O $615000 O $1230000 O $1280000 hp Su prt sc delete hom & 7 backspace P H J Karrow_forwardPRACTICE 1 •A company is preparing for a monthly sales budget for Jan, Feb, & Mar. Sales are 100% on credit. Credit sales for Jan, Feb, and Mar are $140, $180, and $160, respectively. Cash collections are made in - the month of sale: 50% - a month after sale: 30% - two month after sale: 15% - uncollectible: 5% (recognized in the month of sale) Q1. Total cash collection in March? Q2. If the budgeted EB of net A/R on 12/31 is $120 and the budgeted total cash collection in Feb is $162, how much is the total credit sales in November? PRACTICE 2 •A company provides data regarding its operations as follows. •Sales Budget (100% on credit): November: $400,000, December: $375,000, January: $420,000 •Cash collection schedule: Month of sale: 70%, Next Month: 27%, Uncollectible: $3% •The cost of goods sold is 50% of sales. •Monthly depreciation is $15,000. •Other monthly expenses to be paid in cash are $25,000. •60% of the RM purchase is paid for in the month of purchase, the…arrow_forward
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The management of receivables Introduction - ACCA Financial Management (FM); Author: OpenTuition;https://www.youtube.com/watch?v=tLmePnbC3ZQ;License: Standard YouTube License, CC-BY