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Problem 8 - 2 1 ( Algo ) Schedules of Expected Cash Collections and Disbursements [ L 0 8 - 2 , LO 8 -
Problem Algo Schedules of Expected Cash Collections and Disbursements L LO LO You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company's operations: a The cash balance on December is b Actual sales for October and November and expected sales for December are as follows: Cash sales,October,November,DecemberSales on account,Problem Algo Schedules of Expected Cash Collections and Disbursements LO LO LO
You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following
information is available about the company's operations:
a The cash balance on December is $
b Actual sales for October and November and expected sales for December are as follows:
Sales on account are collected over a threemonth period as follows: collected in the month of sale, collected in the month
following sale, and collected in the second month following sale. The remaining is uncollectible.
c Purchases of inventory will total $ for December. Thirty percent of a month's inventory purchases are paid during the month
of purchase. The accounts payable remaining from November's inventory purchases total $ all of which will be paid in
December.
d Selling and administrative expenses are budgeted at $ for December. Of this amount, $ is for depreciation.
e A new web server for the Marketing Department costing $ will be purchased for cash during December, and dividends
totaling $ will be paid during the month.
f The company maintains a minimum cash balance of $ An open line of credit is available from the company's bank to
increase its cash balance as needed.
Required:
Calculate the expected cash collections for December.
Calculate the expected cash disbursements for merchandise purchases for December.
Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume
that any interest will not be paid until the following month.
Complete this question by entering your answers in the tabs below.
Req and
& Required
Calculate the expected cash collections for December.
Calculate the expected cash disbursements for merchandise purchases for December.
Total cash collections
Cash disbursements for merchandise purchase
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