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Enabled: Test 2 ACCT 7 0 1 You have been asked to prepare a December cash budget for Ashton Company. a distributor of exercise equipment.
Enabled: Test ACCT
You have been asked to prepare a December cash budget for Ashton Company. a distributor of exercise equipment. The following information is available about the company's operations:
a The cash balance on December is $
b Actual sales for October and November and expected sales for December are as follows:
Cash sales
sales on account
October
$
$
November
$
$
$
December
$
$
Sales on account are collected over a threemonth period as follows: collected in the month of sale, collected in the month following sale, and collected in the second month following sale. The remaining is uncollectible.
c Purchases of inventory will total $ for December. Thirty percent of a month's inventory purchases are paid during the month of purchase. The accounts payable remaining from November's inventory purchases total $ all of which will be paid in December.
d Selling and administrative expenses are budgeted at $ for December. Of this amount, $ is for depreciation.
e A new web server for the Marketing Department costing $ will be purchased for cash during December, and dividends totaling $ will be paid during the month.
f The company maintains a minimum cash balance of $ An open line of credit is available from the company's bank to increase its cash balance as needed.
Required:
Calculate the expected cash collections for December.
Calculate the expected cash disbursements fr merchandise purchases for December.
Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the following month.
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Req
Calculate the expected cash collections for December.
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