Question
Agua Ole is a distributor of bottled water. For each of the items, compute the amount of cash receipts or payments Agua Ole will budget
Agua Ole is a distributor of bottled water. For each of the items, compute the amount of cash receipts or payments Agua Ole will budget for September. The solution to one item may depend on the answer to an earlier item. Round answers to nearest whole dollar.
a) Management expects to sell equipment that costs $20,000 at a gain of $2,000. Accumulated depreciation on this equipment is $8,000.
The amount of cash receipts the company will budget for the sale of the equipment is $______
b) Management expects to sell 7,100 cases of water in August and 9300 cases in September. Each case sells for $18. Cash sales average 20% of total sales, and credit sales make up for the rest. Three-fourths of credit sales are collected in the month of sale, with the balance collected the following month.
The amount of cash receipts the company will budget for the collection of sale revenue is $______
c) The company pays rent and property taxes of $4,400 each month. Commissions and other selling expenses average 20% of sales. Agua Ole pays one-half of commissions and other selling expenses in the month incurred, with the balance paid the following month.
The amount of cash payments for total expenses the company will budget for September is $_______
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