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Need help need help with this question of for business accounting please! I have uploaded the two parts of the question Question 2: Passing Through
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need help with this question of for business accounting please! I have uploaded the two parts of the question
Question 2: Passing Through Inc. (14 marks) Please leave Column A blank so I can use it for marking. Passing Through Inc. is a merchandising company that buys goods for resale. Passing Through Inc. is preparing a cash budget for the month of March 2021 and has collected the following estimated data: NOTE: If some of the boxes below have #VALUE in them it means you haven't entered your student number on the cover tab. 1 Estimated monthly sales in units: January February March April May 1,250 1,350 1,450 1,300 1,500 2 Average selling price is estimated to be $ 14.60 per unit. All sales are credit sales. Estimated collection pattern for credit sales is 30% in the month of sale, 50% in the month after sale and 20% two months after 3 the sale. 4 The company would like to have ending inventory each month equal to 20% of next months sales. 5 Cost of purchases are estimated to be $ 8.10 per unit and are paid in the month of purchase. 6 Estimated variable operating expenses are 10% of the sales dollar value for that month and they are paid in the month incurred. 7 Estimated annual fixed expenses are presented below. All the expenses are incurred uniformly throughout the year except insurance expenses which are paid in 4 quarterly instalments (March, June, September and December). Annual Fixed Operating Expenses Advertising $ Depreciation Insurance $ Property Taxes Sales and Admin Salaries 11,280.00 12,720.00 14,800.00 13,550.00 14,400.00 Required: Prepare Passing Through Inc.'s cash budget for March 2021. Assume an opening cash balance of: $ 14,500.00 To help you organize this, you will need to: a) Determine the sales budgeted for the first quarter and the amount of cash collected in March. (4 marks) b) Determine the merchandise purchase requirements for March. (3 marks) c) Determine the total cash disbursements for March (purchases, variable operating expenses and fixed operating expenses). (3 marks) d) Prepare the cash budget in good form (only 4 lines are required - opening cash balance plus receipts minus disbursements equals ending cash balance). (4 marks) Do your work belowStep by Step Solution
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