MANAGERIAL ACCT. (LOOSELEAF) WITH CO
16th Edition
ISBN: 9781260707496
Author: Garrison
Publisher: MCG
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Chapter 8, Problem 23P
PROBLEM 8—23 schedule or Expected cash collections;
The president of the retailer Prime Products has just approached the company’s bank with a request for a $30,000. 90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some difficulty in paying off its loans in the past the loan officer has asked for a cash budget to help determine whether the loan should be made. The following data are available for the months April through June, during which the loan will be used:
a. On April 1, the start of the loan period, die cash balance will be $24,000. Accounts receivable on April 1 will total $140,000, of which $120,000 will be collected during April and $16,000 will be collected during May. The remainder will be uncollectible.
b. Past experience shows that 30% of a mouth's sales are collected in the mouth of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% is
c. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid in April, total $140,000.
d. In preparing the cash budget, assume that the $30,000 loan will he mode in April and repaid in June Interest on the loan will total $1,200.
Required:
- Calculate the expected cash collections for April, May, and Tune, and for the three months in total.
- Prepare a cash budget, by month and in total, for the three-month period.
- If the company needs a minimum cash balance of $20,000 to start each month, can the loan be repaid as planned? Explain.
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Problem 8-23 Schedule of Expected Cash Collections; Cash Budget [LO8-2, LO8-8]
The president of the retailer Prime Products has just approached the company’s bank with a request for a $51,000, 90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some difficulty in paying off its loans in the past, the loan officer has asked for a cash budget to help determine whether the loan should be made. The following data are available for the months April through June, during which the loan will be used:
On April 1, the start of the loan period, the cash balance will be $24,400. Accounts receivable on April 1 will total $151,200, of which $129,600 will be collected during April and $17,280 will be collected during May. The remainder will be uncollectible.
Past experience shows that 30% of a month’s sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2%…
Exercise 7-3A (Algo) Preparing a schedule of cash receipts LO 7-2
The budget director of Heather's Florist has prepared the following sales budget. The company had $132,600 in accounts receivable
on July 1. Heather's Florist normally collects 100 percent of accounts receivable in the month following the month of sale.
Required
a. Complete the schedule of cash receipts by filling in the missing amounts.
b. Determine the amount of accounts receivable the company will report on its third quarter pro forma balance sheet.
Complete this question by entering your answers in the tabs below.
Required A Required B
Complete the schedule of cash receipts by filling in the missing amounts.
Sales Budget
Cash sales
Sales on account
Total budgeted sales
Schedule of Cash Receipts
Current cash sales
Plus: Collections from accounts receivable
$
July
70,000 $
97,000
$ 167,000 $
$
August
70,000 $
+
September
82,000 $
116,000
198,000
82,000
78,000
132,600
$ 210,600
$ 78,000
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Exercise 13-35 (Algo) Estimate Cash Collections (LO 13-5)
Minot Corporation is preparing its cash budget for August. The following information is availlable concerning its accounts receivable:
Estimated credit sales for August
Actual credit sales for July
Estimated collections in August for credit sales in August
Estimated collections in August for credit sales in July
Estimated collections in August for credit sales prior to July
Estimated write-offs in August for uncollectible credit sales
Estimated provision for bad debts in August for credit sales in August
$ 80,000
$ 60,000
25%
70%
$6,000
$ 4,000
$2,700
Required:
What is the estimated amount of cash receipts from accounts receivable collections in August?
Estimated cash receipts
$ 71,000
Chapter 8 Solutions
MANAGERIAL ACCT. (LOOSELEAF) WITH CO
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. 17ECh. 8 - Prob. 18ECh. 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 B-25 Cash Budget with Supporting...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. 31PCh. 8 -
CASE 8-32 Evaluatinga Company’s Budget Procedures...Ch. 8 - CASE 8-33 Master Budget with Supporting Schedules...
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