Question
Academic Learning had prepared the following sales budget, schedule of budgeted cash receipts, and cash budget for 2019: Academic Learning Sales Budget For the Year
Academic Learning had prepared the following sales budget, schedule of budgeted cash receipts, and cash budget for 2019:
| Academic Learning | |||||
| Sales Budget | |||||
| For the Year Ended December 31, 2019 | |||||
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| First | Second | Third | Fourth |
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| Quarter | Quarter | Quarter | Quarter | Total |
| Budgeted tablets to be sold | 550 | 350 | 1,600 | 500 | 3,000 |
| Sales price per unit | $550 | $550 | $550 | $550 | $550 |
| Total sales | $302,500 | $192,500 | $880,000 | $275,000 | $1,650,000 |
| Schdule of Cash Receipts from Customers |
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| First | Second | Third | Fourth |
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| Quarter | Quarter | Quarter | Quarter | Total | |
| Total sales | $302,500 | $192,500 | $880,000 | $275,000 | $1,650,000 | |
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| First | Second | Third | Fourth |
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| Quarter | Quarter | Quarter | Quarter | Total |
| Cash Receipts from Customers: |
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| Accounts Receivable balance, December 31, 2018 | $22,000 |
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| 1st Qtr.Cash sales (20%) | 60,500 |
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| 1st Qtr.Credit sales (80%), 40% collected in 1st qtr. | 96,800 |
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| 1st Qtr.Credit sales (80%), 60% collected in 2nd qtr. |
| $145,200 |
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| 2nd Qtr.Cash sales (20%) |
| 38,500 |
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| 2nd Qtr.Credit sales (80%), 40% collected in 2nd qtr. |
| 61,600 |
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| 2nd Qtr.Credit sales (80%), 60% collected in 3rd qtr. |
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| $92,400 |
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| 3rd Qtr.Cash sales (20%) |
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| 176,000 |
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| 3rd Qtr.Credit sales (80%), 40% collected in 3rd qtr. |
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| 281,600 |
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| 3rd Qtr.Credit sales (80%), 60% collected in 4th qtr. |
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| $422,400 |
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| 4th Qtr.Cash sales (20%) |
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| 55,000 |
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| 4th Qtr.Credit sales (80%), 40% collected in 4th qtr. |
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| 88,000 |
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| Total cash receipts from customers | $179,300 | $245,300 | $550,000 | $565,400 | $1,540,000 | |
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| Accounts Receivable balance, December 31, 2019: |
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| 4th Qtr.Credit sales (80%), 60% collected in 1st qtr of 2020 | $132,000 |
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| Academic Learning | ||||||
| Cash Budget | ||||||
| For the Year Ended December 31, 2019 | ||||||
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| First | Second | Third | Fourth |
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| Quarter | Quarter | Quarter | Quarter | Total | |
| Beginning cash balance | $38,000 | $35,575 | $35,680 | $35,525 | $38,000 | |
| Cash receipts | 179,300 | 245,300 | 550,000 | 565,400 | 1,540,000 | |
| Cash available | 217,300 | 280,875 | 585,680 | 600,925 | 1,578,000 | |
| Cash payments: |
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| Capital expenditures | 40,000 | 40,000 | 40,000 | 40,000 | 160,000 | |
| Purchases of direct materials | 33,280 | 146,880 | 172,440 | 139,320 | 491,920 | |
| Direct labor | 14,080 | 38,400 | 88,320 | 33,280 | 174,080 | |
| Manufacturing overhead | 97,640 | 100,300 | 105,760 | 99,740 | 403,440 | |
| Selling and administrative expenses | 59,725 | 58,625 | 65,500 | 59,450 | 243,300 | |
| Income taxes | 3,000 | 3,000 | 3,000 | 3,000 | 12,000 | |
| Interest expense | 0 | 990 | 3,135 | 2,055 | 6,180 | |
| Total cash payments | 247,725 | 388,195 | 478,155 | 376,845 | 1,490,920 | |
| Ending cash balance before financing | (30,425) | (107,320) | 107,525 | 224,080 | 87,080 | |
| Minimum cash balance desired | (35,000) | (35,000) | (35,000) | (35,000) | (35,000) | |
| Projected cash excess (deciency) | (65,425) | (142,320) | 72,525 | 189,080 | 52,080 | |
| Financing: |
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| Borrowing | 66,000 | 143,000 | 0 | 0 | 209,000 | |
| Principal repayments | 0 | 0 | (72,000) | (137,000) | (209,000) | |
| Total effects of financing | 66,000 | 143,000 | (72,000) | (137,000) | 0 | |
| Ending cash balance | $35,575 | $35,680 | $35,525 | $87,080 | 87,080 | |
Academic Learning decided to revise its sales budget to show fourth quarter sales of 650 tablets due to the expectation of increased holiday sales.
Suppose a change in the receipt of cash from sales on account is as follows:
Requirement 1. Revise the schedule of budgeted cash receipts to include the increase in fourth quarter sales and the change in the timing of customer receipts. (If a box is not used in the table, leave the box empty; do not enter a zero. Round your answers to the nearest dollar.)
Requirement 2. How will the changes in cash receipts affect the cash budget?
Academic Learning Sales Budget For the Year Ended December 31, 2019 Third First Second Fourth Quarter Quarter Quarter Quarter Total 350 650 550 1,600 550 S Budgeted tablets to be sold 3,150 550 S 550 $ 550 $ $ 550 Sales price per unit 302,500 $ 192,500 S 357,500 1,732,500 880,000 $ Total sales - X More Info 40% in the quarter of the sale 30% in quarter after the sale 28% two quarters after the sale 2% never collected Print Done Schdule of Cash Receipts from Customers Fourth First Second Third Quarter Total Quarter Quarter Quarter Total sales Third Fourth First Second Quarter Quarter Quarter Quarter Total Cash Receipts from Customers: Accounts Receivable balance, December 31, 2018 1st Qtr.-Cash sales 1st Qtr-Credit sales collected in 1st qtr. 1st Qtr-Credit sales collected in 2nd qtr. 1st Qtr-Credit sales collected in 3rd qtr. 2nd Qtr-Cash sales 2nd Qtr-Credit sales collected in 2nd qtr. 2nd Qtr-Credit sales collected in 3rd qtr. 2nd Qtr.-Credit sales collected in 4th qtr. 3rd Qtr-Cash sales 3rd Qtr-Credit sales collected in 3rd qtr. 3rd Qtr-Credit sales collected in 4th qtr. 4th Qtr-Cash sales 4th Qtr-Credit sales collected in 4th qtr. Total cash receipts from customersStep by Step Solution
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Accounting A Systems Approach
Authors: Alison Warman, Jeff Davies
1st Edition
1861520379, 978-1861520371
