Question
Cash Budget The Williams Supply Company sells for $50 one product that it purchases for $20. Budgeted sales in total dollars for the year are
Cash Budget The Williams Supply Company sells for $50 one product that it purchases for $20. Budgeted sales in total dollars for the year are $3,000,000. The sales information needed for preparing the July budget follows:
Month Sales Revenue May $ 175,000 June 240,000 July 295,000 August 320,000
Account balances at July 1 include these: Cash $ 125,000 Merchandise inventory 47,200 Accounts receivable (sales) 84,530 Accounts payable (purchases) 47,200
The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 40% of the budgeted sales in units for the next month. A 2% cash discount on sales is allowed if payment is made during the month of sale. Experience indicates that 60% of the billings will be collected during the month of sale, 25% in the following month, 12% in the second following month, and 3% will be uncollectible. Total budgeted selling and administrative expenses (excluding bad debts) for the fiscal year are estimated at $1,200,000, of which three-fourths is fixed expense (inclusive of a $36,000 annual depreciation charge). Fixed expenses are incurred evenly during the year. The other selling and administrative expenses vary with sales. Expenses are paid during the month incurred.
- Part A
- Part B
- Part C
- Part D
(c) Prepare schedules of July selling and administrative expenses, separately identifying those requiring cash disbursements.
WilliamsSupply Company Schedule of Selling and Administrative Expenses and Cash Disbursements For the Month of July | ||
---|---|---|
Total | Cash | |
Selling and administrative expenses: | ||
Fixed | Answer | |
Cash payment | Answer | |
Variable | Answer | Answer |
Total expenses and cash disbursements | Answer | Answer |
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