Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

30k int :nces a. The cash balance on December 1 is $41,000. b. Actual sales for October and November and expected sales for December are

image text in transcribed
30k int :nces a. The cash balance on December 1 is $41,000. b. Actual sales for October and November and expected sales for December are as follows: October Hover-Iber December Cash sales 5 63,400 $ 87,408 5 95,800 Sales on account 5 415,000 $ 614,008 5 692,000 Sales on account are collected over a threemonth period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible. c. Purchases of inventory will total $376,000 for December. Thirty percent of a month's inventory purchases are paid during the month of purchase. The accounts payable remaining from November's inventory purchases total $1?4,500, all of which will be paid in December. d. Selling and administrative expenses are budgeted at $452,000 for December. Of this amount, $63,600 is for depreciation. e. A new web server for the Marketing Department costing $86,500 will be purchased for cash during December, and dividends totaling $10,500 will be paid during the month. 1'. The company maintains a minimum cash balance of $20,000. An open line of credit is available from the company's bank to increase its cash balance as needed. Required: 1. Calculate the expected cash collections for December. 2. Calculate the expected cash disbursements for merchandise purchases for December. 3. Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume +h-n- nu in+nrnr~1 urill nn+ kn n-uirl Ilr|+i|+|1n 'Fnllnlllinn .11th

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_2

Step: 3

blur-text-image_3

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

Computer Accounting

Authors: Donna Kay

14th Edition

007762453X, 9780077624538

More Books

Students also viewed these Accounting questions

Question

3. Im trying to point out what we need to do to make this happen

Answered: 1 week ago

Question

1. I try to create an image of the message

Answered: 1 week ago