Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Nuttsie's Uniforms has been in business since January of the current year. The company buys medical supplies and clothing and resells them to doctors and

image text in transcribed
image text in transcribed
Nuttsie's Uniforms has been in business since January of the current year. The company buys medical supplies and clothing and resells them to doctors and nurses. The following information pertains to Nuttsie's Uniforms first four months of operations: Purchases Sales Jan... $45,000 $67,000 37,000 54,000 Feb... Mar........ 49,000 70,000 Apr... 29,000 47,000 Nuttsie's Uniforms expects to open several new sales territories in May. In anticipation of increased volume, management forecasts May sales at $77,000. To meet this demand, purchases in May are budgeted at $47.000. All of Nuttsie's Uniforms sales are on account. Due to strict credit policies, the company has no bad debt expense. The following collection performance is anticipated for the remainder of the year: Percent collected in month of sale.. 30% Percent collected in month of following sale.......................... 60% Percent collected in the second month following sale.......... 10% Nuttsie's Uniforms normally pays for 80 percent of its purchases in the month that the purchases are made. The remaining amount is paid in the following month. The company's fixed selling and administrative expenses average $12,000 per month, of which $4,000 is depreciation Nuttsie's Uniforms normally pays for 80 percent of its purchases in the month that the purchases are made. The remaining amount is paid in the following month. The company's fixed selling and administrative expenses average $12,000 per month, of which $4,000 is depreciation expense. Variable selling and administrative expenses are budgeted at 5 percent of sales. The company pays all of its selling and administrative expenses in the month that they are incurred. In addition, Nuttsie's Uniforms makes a loan payment of principal and interest expense of $4,000 in May. Instructions: Prepare Nuttsie's Uniforms cash budget for May. Assume that the company's cash balance on May 1st is $20,000

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

How To Audit Document Control System Based On ISO 9001 2015

Authors: Folarin Omojoye

1st Edition

B09892NF88, 979-8525615175

More Books

Students also viewed these Accounting questions