Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 7-17B Schedules of Expected Cash Collections and Disbursements [LO7-2, LO7-4, LO7-8 Ojai Products, a distributor of organic beverages, needs a cash budget for September.

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Problem 7-17B Schedules of Expected Cash Collections and Disbursements [LO7-2, LO7-4, LO7-8 Ojai Products, a distributor of organic beverages, needs a cash budget for September. The following information is available: a. The cash balance at the beginning of September is $12,800 b. Actual sales for July and August and expected sales for September are as follows uly August September Cash sales Sales on account $ 6,100 $4,100 $ 9,500 21,000 26,000 37,000 Total sales 27,100 30,100 46,500 Sales on account are collected over a three-month period as follows: 10% collected in the month of sale, 65% collected in the month following sale, and 21% collected in the second month following sale The remaining 4% is uncollectible. c. Purchases of inventory will total $25,000 for September. Thirty percent of a month's inventory purchases are paid for during the month of purchase. The accounts payable remaining from August's inventory purchases total $16,000, all of which will be paid in September. d. Selling and administrative expenses are budgeted at $14,000 for September. Of this amount, $4.,000 is e. Equipment costing $18,000 will be purchased for cash during September, and dividends totaling $4,000 f. The company maintains a minimum cash balance of $8,800. An open line of credit is available from the for depreciation. will be paid during the month. company's bank to bolster the cash balance as needed. Sales on account are collected over a three-month period as follows: 10% collected in the month of sale, 65% collected in the month following sale, and 21% collected in the second month following sale. The remaining 4% is uncollectible. c. Purchases of inventory will total $25,000 for September. Thirty percent of a month's inventory purchases d. Selling and administrative expenses are budgeted at $14,000 for September. Of this amount, $4,000 is e. Equipment costing $18,000 will be purchased for cash during September, and dividends totaling S4,000 f. The company maintains a minimum cash balance of $8,800. An open line of credit is available from the Required: are paid for during the month of purchase. The accounts payable remaining from August's inventory purchases total $16,000, all of which will be paid in September 8 for depreciation. will be paid during the month. company's bank to bolster the cash balance as needed. tPrpare a schadule of expected cash collections for September. (Do not round intermediate calculations.) Ojai Products Schedule of Expected Cash Collections September cash sales September collections on account: July sales August sales September sales Total cash collections 2. Prepare a schedule of expected cash disbursements for inventory purchases for September. (Do not round intermediate calculations.) Ojai Products Schedule of Expected Cash Disbursements Payments to suppliers: August purchases September purchases Total cash payments 3. Prepare a cash budget for September. Indicate in the financing section any borrowing that will be needed during September. Assume that any interest will not be paid until the following month. Ojai Products Cash Budget For the Month of September Cash balance, September 1 Add cash receipts: Collections from customers Total cash available before current financing Less disbursements: Payments to suppliers for inventory Selling and administrative expenses Equipment purchases Dividends paid Total disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Cash balance, September 30

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

Principles Of Auditing An Introduction To International Standards On Auditing

Authors: Rick Stephan Hayes, Roger Dassen, Arnold Schilder, Philip Wallage

2nd Edition

0273684108, 978-0273684107

More Books

Students also viewed these Accounting questions

Question

3. Explain how to conduct an appraisal feedback interview.

Answered: 1 week ago

Question

1. Answer the question, Who should do the appraising?

Answered: 1 week ago