Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Peoria Supply Company sells for $30 one product that it purchases for $20. Budgeted sales in total dollars for next year are $720,000. The

The Peoria Supply Company sells for $30 one product that it purchases for $20. Budgeted sales in total dollars for next year are $720,000. The sales information needed for preparing the July budget follows:

Month Sales Revenue
May $ 30,000
June 42,000
July 51,000
August 54,000

Account balances at July 1 include these:

Cash $ 20,000
Merchandise inventory 18,000
Accounts receivable (sales) 23,000
Accounts payable (purchases) 12,000

The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 50 percent of the budgeted sales in units for the next month. A 2 percent cash discount on sales is allowed if payment is made during the month of sale. Experience indicates that 50 percent of the billings will be collected during the month of sale, 40 percent in the following month, 8 percent in the second following month, and 2 percent will be uncollectible. Total budgeted selling and administrative expenses (excluding bad debts) for the fiscal year are estimated at $180,000 , of which one-half is fixed expense (inclusive of a $18,000 annual depreciation charge). Fixed expenses are incurred evenly during the year. The other selling and administrative expenses vary with sales. Expenses are paid during the month incurred. (Round your answers to the nearest whole number.)

c) Prepare schedules of July selling and administrative expenses, separately identifying those requiring cash disbursements.

Peoria Supply Company Schedule of Selling and Administrative Expenses and Cash Disbursements For the Month of July
Total Cash
Selling and administrative expenses:
Fixed Answer

Cash payment Answer

Variable Answer

Answer

Total expenses and cash disbursements Answer

Answer

Prepare a cash budget in summary form for July.

Do not use negative signs with any of answers below.

Peoria Supply Company Cash Budget For the Month of July
Cash receipts Answer

Cash disbursements:
Merchandise Answer

Selling and administrative Answer

Answer

Excess receipts (disbursements) Answer

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

Leading The Digital Workforce Internal Audit And IT Audit

Authors: Jeffrey W. Brown

1st Edition

1032323736, 978-1032323732

More Books

Students also viewed these Accounting questions

Question

HOW DO MANAGERS RANK INVESTMENT PROJECTS? LO.1

Answered: 1 week ago

Question

c. What were you expected to do when you grew up?

Answered: 1 week ago

Question

4. Describe how cultural values influence communication.

Answered: 1 week ago

Question

3. Identify and describe nine cultural value orientations.

Answered: 1 week ago