Excel Applications for Accounting Principles
4th Edition
ISBN: 9781111581565
Author: Gaylord N. Smith
Publisher: Cengage Learning
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Campbell Company, which sells electric razors, had $360,000 of cost of goods sold during the month of June. The company projects a 9 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $30,000, and the desired ending inventory balance for July is $31,000. Widden pays cash to settle 75 percent of its purchases on account during the month of purchase and pays the remaining 25 percent in the month following the purchase. The accounts payable balance as of June 30 was $32,000.
A. Determine the amount of purchases budgeted for July?B. Determine the amount of cash payments budgeted for inventory purchases in July?
Lakeside Components wishes to purchase parts in one month for sale in the next. On June 1, the company has 9,000 parts in stock, although sales for June are estimated to total 11,400 parts. Total sales of parts are expected to be 8,800 in July and 13,900 in August. Parts are purchased at a wholesale price of $15. The supplier has a financing arrangement by which Lakeside Components pays 70 percent of the purchase price in the month when the parts are delivered and 30 percent in the following month. Lakeside purchased 15,000 parts in May.
Required:a. Estimate purchases (in units) for June and July.b. Estimate the cash required to make purchases in June and July.
Required A
Required B
Estimate purchases (in units) for June and July.
June
July
Merchandise to be purchased in units
Month of Payment
Total
June
not attempted
July
Magenta Corporation has the following sales forecasts for the selected three-month period for the current year:
Month
Sales
July
$30,000
August
15,000
September
12,000
All sales are on account. Sixty percent of sales are collected in the month of the sale, and the remainder are collected in the following month.
Accounts receivable balance (July 1)
$28,000
Cash balance (July 1)
17,000
Minimum cash balance is $13,000. Cash can be borrowed in $2,000 increments from the local bank (assume no interest charges).What is the cash balance at the end of July, assuming that cash is received only from customers and that $53,000 is paid out during July?
a.$18,500
b.$14,000
c.$25,000
d.$20,200
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