Question
Dryden Industries, a wholesale company, is considering whether to open a new distribution center. The center would open on October 1, 2022. To make the
Dryden Industries, a wholesale company, is considering whether to open a new distribution center. The center would open on October 1, 2022. To make the decision, the planning committee requires a master budget (Sales, Purchases, Selling & Admin, Cash) for the center's first quarter of operation (October, November, and December of 2022). Required
Construct the first quarter master budget based on the following expectations:
a. October sales are estimated to be $600,000 of which $120,000 will be cash sales and $480,000 will be on credit. The company expects sales to grow 8% per month for the first few months of operation. Prepare a sales budget for the first quarter.
b. The company expects to collect 25% of accounts receivable in the month of sale and 75% the following month. Prepare a schedule of expected cash receipts for the first quarter.
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