Cash collections Ridenour Ltd. is preparing its first-quarter monthly cash budget for Year 4. The following information is available about actual Year 3 sales and expected Year 4 sales: November December January February March $132.800 $121,600 $126400 $140800 $94,400 Tracing collections from prior year monthly sales and discussions with the credit manager helped develop a profile of collection behavior patterns. of a given month's sales, 40 percent is typically collected in the month of sale. Because the company terms are 1 percent (end of month) net 30, all collections within the month of sale are net of the 1 percent discount. Of a given month's sales, 30 percent is collected in the month following the sale. The remaining 30 percent is collected in the second month following the month of the sale. Bad debts are negligible and should be ignored. a. Prepare a schedule of cash collections for Ridenour Ltd. for January, February, and March of Year 4. Note: Enter amounts rounded to the nearest whole dollar. Nov, sales Dec. sales Jan sales Feb. sales S Cash Collections Check January 39.840 $ 36,490 50.054 0 0 February 05 36,480 37.920 55,757 0 Mar, sales Total collections $ 126.374 S 130,157 $ March 0 0 37,920 42,240 37,382 117,542 b. Calculate the Accounts Receivable balance at March 31, Year 4. $ 70,560 2-1 Budgeted income statement The operating results in summarized form for a retail computer store for this year are: Revenue Hardware sales Software sales Maintenance contracts Total revenue Costs and expenses: Cost of hardware sales Cost of software sales Marketing expenses Customer maintenance costs Administrative expenses Total costs and expenses Operating income $10.560.000 4400,000 2640,000 $17,600,000 $7,392,000 2640,000 1.320.000 1,408,000 2,464,000 $15,224,000 $2.376.000 The computer store is in the process of formulating its operating budget for next year and has made the following assumptions: The selling prices of hardware are expected to increase 10 percent but there will be no selling price increases for software and maintenance contracts. Hardware unit sales are expected to increase 5 percent with a corresponding 5 percent growth in the number of maintenance contracts; growth in unit software sales is estimated at 8 percent. The cost of hardware and software is expected to increase 4 percent. Marketing expenses will be increased 5 percent in the coming year. Three technicians will be added to the customer maintenance operations in the coming year, increasing the customer maintenance costs by $264,000. Administrative costs will be held at the same level. The cost of hardware and software is expected to increase 4 percent. Marketing expenses will be increased 5 percent in the coming year. Three technicians will be added to the customer maintenance operations in the coming year, increasing the customer maintenance costs by $264,000. Administrative costs will be held at the same level. Compute the computer retail store's budgeted operating income for next year. $0 Check