Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 1 (13 marks) Radcliff Ltd. has budgeted the following sales for the next three months: Budgeted Sales January $80,000 February $100,000 March $140,000 Ninety

image text in transcribed
Question 1 (13 marks) Radcliff Ltd. has budgeted the following sales for the next three months: Budgeted Sales January $80,000 February $100,000 March $140,000 Ninety percent of sales are on account and ten percent of sales are cash sales. A month's sales on account are collected as follows: Month of sale First month following sale Second month following sale Uncollectible 50% 40% 9% 1% The company requires a minimum cash balance of $7,000 to start a month. The beginning cash balance in March is budgeted to be $8,000. The following additional information has been provided for the company: February Inventory purchases (75% paid in February, the remainder paid in March) $55,000 March Inventory purchases (75% paid in March, the remainder to be paid in April) $43,000 Operating expenses (all paid in March) 35,000 Depreciation expense for March 15,000 Dividends paid in March 7,500 a) Compute the budgeted cash receipts for March. b) Prepare a cash budget in good form for the month of March. The company can borrow in any dollar amount and will not pay interest until April. c) Why is it important for a company to create monthly cash budgets

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

Eco Management And Audit Scheme

Authors: Gerardus Blokdyk

3rd Edition

0655169709, 978-0655169703

More Books

Students also viewed these Accounting questions

Question

Write formal and informal proposals.

Answered: 1 week ago

Question

Describe the components of a formal report.

Answered: 1 week ago

Question

Write formal and informal reports.

Answered: 1 week ago