Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gilbert Ortega operates a small boutique in Scottsdale, Arizona that sells Kachina dolls. Gilbert expects to generate revenues of $40,000, $50,000, and $60,000 during October,

Gilbert Ortega operates a small boutique in Scottsdale, Arizona that sells Kachina dolls. Gilbert expects to generate revenues of $40,000, $50,000, and $60,000 during October, November, and December, respectively. Gilbert's cost of goods sold average 60 percent of revenues, and his budgeted marketing and administrative costs are $4,000, $6,000, and $5,000 for October, November, and December respectively. Gilbert expects to receive 70% of his revenues in cash during the month of sale and 30% in the following month. Gilbert receives his dolls on consignment, with the purchase price being due at the time of the sale. Thus, Gilbert's cash outflow for goods sold equals his cost of goods sold. Finally, Gilbert pays for all marketing and administrative expenses in cash as they are incurred. Prepare Gilbert's cash budget for November and December. Assume that Gilbert expects to have $16,000 in cash on November 1

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Financial Accounting

Authors: Charles T Horngren, Gary L Sundem

10th Edition

136122973, 978-0136122975

More Books

Students also viewed these Accounting questions

Question

=+b) What if those two probabilities are reversed?

Answered: 1 week ago

Question

1. Too understand personal motivation.

Answered: 1 week ago