Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Howe Ltd. wants to see a view of sales budget, purchase budget and cash collection budget for this set of information using excel The president,

Howe Ltd. wants to see a view of sales budget, purchase budget and cash collection budget for this set of information using excel The president, Joan Howe, has collected the following information about her operations as at December 31: 1. Balance of selected ledger accounts:

Howe Ltd. is attempting to find out what the sales budget, purchase budget and cash/disimbursment collection budget will look like. The president, Joan Howe, has collected the following information about her operations as at December 31: 1. Balance of selected ledger accounts:
Cash $2,500
Accounts payable 6,667
2. Sales history and forecast (unit selling price, $10):
October (actual) $45,000
November (actual) 33,000
December (actual) 45,000
January (forecast) 60,000
3. All sales are on credit and are due 30 days after the sale.
4. Cash payments for purchases are as follows: two-thirds in the month of purchase; one-third in the month after that.
5. Howe Ltd. collects 50% of a months sales one month after the sale and 45% two months after the sale; 5% are uncollectible.
6. The company purchases inventory as required under terms of 2/10, net 30. It always takes the 2% discount, but records purchases at gross cost.
7. Inventory costs $5 per unit, gross.
8. Other expenses, all paid in cash as incurred, average about 30% of the sales dollar amount. Depreciation is part of these expenses and costs $3,000 per month.
9. Howe Ltd. keeps a minimum cash balance of $4,000.

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

Step: 3

blur-text-image

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

Health And Safety Environment And Quality Audits

Authors: Stephen Asbury

1st Edition

9780750680264, 978-0750680264

More Books

Students also viewed these Accounting questions