Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Oneida Company s operations began in August. August sales were $ 1 5 0 , 0 0 0 and purchases were $ 1 1 5

Oneida Companys operations began in August. August sales were $150,000 and purchases were $115,000. The beginning cash balance for september is $32,000. Oneidas owner approaches the bank for a $107,500 loan to be made on September 2 and repaid on November 30. The banks loan officer asks the owner to prepare monthly cash budgets. Its budgeted sales, merchandise purchases, and cash payments for other expenses for the next three months follow.
Budgeted September October November
Sales $ 230,000 $ 455,000 $ 460,000
Merchandise purchases 230,000220,000198,000
Cash payments
Salaries 29,80029,80029,800
Rent 12,00012,00012,000
Insurance 4,1004,1004,100
Repayment of loan 107,500
Interest on loan 1,0751,0751,075
All sales are on credit where 79% of credit sales are collected in the month following the sale, and the remaining 21% collected in the second month following the sale. All merchandise is purchased on credit; 89% of the balance is paid in the month following a purchase, and the remaining 11% is paid in the second month.
Required:
Prepare the following for the months of September, October, and November.
1. Schedule of cash receipts from sales.
2. Schedule of cash payments for direct materials.
3. Cash budget.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Statement Analysis

Authors: K. R. Subramanyam, John Wild

11th edition

78110963, 978-0078110962

More Books

Students also viewed these Accounting questions

Question

10 What must there be for (a) every debit; and (b) every credit?

Answered: 1 week ago

Question

=+Based on this, what model might you use to predict Log10Price?

Answered: 1 week ago