Answered step by step
Verified Expert Solution
Question
1 Approved Answer
ABC Company provides security merchandizes. It employs five security specialists. Each specialist works an average of 150 hours a month. The company's controller has compiled
ABC Company provides security merchandizes. It employs five security specialists. Each specialist works an average of 150 hours a month. The company's controller has compiled the information relating to the actual data of November and December 2020 and budgeted data of January to April of 2021: ... ... ... ... Nov ($) Dec ($) ...... Details Jan ($) ... Feb ($).... Mar ($) ... ... ... Apr ($) Sales .................... 31700 ... ... ... 35600 .......... 25300 ... ... ... 21900 ... ... 30600 ... ... 33300 Purchases ... ... ... ... 2530 .......... 3730 ......... 2510 ........... 2210 ....... .. 2830 Selling expenses.... 12000 ... ... ... 12600 ...........9100 ...... .... 8000 ... 10400 ... ... ... 9700 Service overhead... 3200 ........... 3600 ... ... ... ... 3100 ........... 2800.... 3200 ... ... ... 3700 ..... 3090 >>>> 50 % of the Sales are cash sales collected during the month of sale; 20% are collected in the first month following the sale and the rest collected in the second month following the sale. Purchases of supplies are paid for in the month following purchase. Selling expenses and service overhead are paid one-month in advance. >>>> Income taxes of $4700 for last calendar year are due and payable on March 15. The five security specialists each earn $10.0 an hour. It expects its cash balance on December 31 to be $13000. On January 1, the company will take a 5-month bank loan of $60000 at a 14% annual interest rate. Interest is to be paid monthly, and $3000 of the loan principal is due on February 28. Prepare quarterly (a) cash collection schedule and (b) cash budget for ABC Company for the three month period ended March 31, 2021
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started