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The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following
The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:
Line Item Description September October November
Sales $ $ $
Manufacturing costs
Selling and administrative expenses
Capital expenditures
The company expects to sell about of its merchandise for cash. Of sales on account, are expected to be collected in the month following the sale and the remainder the following month second month following sale Depreciation, insurance, and property tax expense represent $ of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, are expected to be paid in the month in which they are incurred and the balance in the following month.
Current assets as of September include cash of $ marketable securities of $ and accounts receivable of $$ from July sales and $ from August sales Sales on account for July and August were $ and $ respectively. Current liabilities as of September include $ of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $ will be made in October. Bridgeports regular quarterly dividend of $ is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $
Required:
Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume days per year for interest calculations. Student question: I need help to understand the step that was detailed from the last answer I received. How do I calculate the Collection of Accounts Reveivable for September, October, and November? Attached is my attempt to replicate what the Chegg expert said, but for some reason I do not understand why the numbers don't add up or why it is wrong. How do I calculate the accounts that have money to be collected in what months and why?
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