Question
Quillin Company had the following budgeted information for October: 1. October 1 cash balance $3,500 2. Expected sales 2,500 units at $25 each (half in
Quillin Company had the following budgeted information for October:
1. | October 1 cash balance $3,500 |
2. | Expected sales 2,500 units at $25 each (half in cash, remainder on credit due in November) |
3. | Inventory purchases 3,000 units at $14 each (all in cash) |
4. | Rent $1,450 |
5. | Payroll $1,000 |
6. | Utilities and other costs $4,500 |
7. | Accounts receivable balance Oct. 1, $35,000 (includes $700 bad debts allowance; use this amount for both parts A and D). |
A. | What is the budgeted collection on accounts receivable for October? |
B. | What are the total cash disbursements for October? |
C. | What is the ending cash balance for October? |
D. |
Assuming sales are collected 75% in the month of sale and 25% the following month, what is the ending cash balance for October?
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