Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please answer Question 5a. Please answer in this format (see below as an example) Question 5 Bluebird Ltd has provided the following forecasted items for
Please answer Question 5a.
Please answer in this format (see below as an example)
Question 5 Bluebird Ltd has provided the following forecasted items for the months of July through to September 2020. July August Septembe $ $ $ Sales 14,000 15,000 13,000 9,400 Purchases 8,000 10,000 Operating expenses 3,600 6,400 5,000 Other Information: 35% of Sales are cash sales, the remaining 65% of credit sales which are collected as follows: o 30% in the month of the sale O 40% in the month after the sale o 28% in the 2nd month after the sale o 2% are never collected due to the customer going bankrupt Sales in the months of May and June were $11,000 and $10,000 respectively. . Operating expenses include depreciation expense. Depreciation expense each month is $900. All expenses and purchases are paid for in the same month that they are incurred. Bluebird expects to sell some old machinery for $7,000 in August. New machinery worth $9,500 will be purchased in September. The cash balance on 1st July 2020 is $5,700. Required: a. Prepare a schedule of the Cash receipts from Accounts receivable showing the collections for the three months of July through to September. (5 marks) b. Prepare a Cash budget for Bluebird Ltd for the three months of July through to September 2020. (10 marks) January 20,000 February 30,000 March 40,000 Credit sales Credit sale cash receipts from current month sales (60%) from previous month sales (40%) Total cash receipts from accounts receivable 12,000 16,000 28,000 18,000 8,000 26,000 24,000 12,000 36,000Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started