Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
please help with Problem 23.3b Bailey Distributors wants a projection of cash receipt and cash payments for the month of November. On November 28, a
please help with Problem 23.3b Bailey Distributors wants a projection of cash receipt and cash payments for the month of November. On November 28, a note will be payable in the amount of $92,250, including interest. The cash balance on November 1 is $ 37, 200. Accounts payable to merchandise creditors at the end of October were $ 206, 000. The company's experience indicates that 75 percent of sales will be collected during the month the of sale, 20 percent in the month following the sale, and 3 percent in the second month following the sale; 2 percent will be uncollectible. The company sells various products at an average price of $ 10 per unit. Selected sales figures are as follows: Because purchases are payable within 15 days, approximately 50 percent of the purchases in a given month are paid in the following month. The average cost of units purchased is $6 per unit. Inventories at the end of each month are maintained at a level of 2,000 units plus 10 percent of the number of units that will be sold in the following month. The inventory on October 1 amounted to 9,000 units. Budgeted operating expenses for November are $250,000. Of this amount, $100,000 is considered fixed (including depreciation of $40,000). All operating expenses, other than depreciation, are paid in the month in which they are incurred. The company expects to sell fully depreciated equipment in November for $9,000 cash. Prepare a cash budget for the month of November, supported by schedules of cash collections on cash payments for purchases of merchandise
please help with Problem 23.3b
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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