1. The treasurer of Soda Inc. needs to estimate cash collections from accounts receivable for October, November, and December 2019. Forty percent of the companys customers pay in cash the rest are credit customers. The collection pattern for the credit customers is 20% in the month of the sale and 80% in the following month. They have zero uncollectible accounts. Estimated total sales are as follows:

September $70,000

October $80,000

November $90,000

December $100,000

a. What is Yodas cash collections for October, November, and December?

- October cash collections:

- November cash collections:

- December cash collections:

b. The accounts receivable balance at the end of December will be:

2. The following is a cash budget. Assume need a minimum cash balance of 5,000 at the start of each month. All borrowing are made in even 1,000 increments (not repayments). No borrowing or investments exist at the beginning of July. Interest is 1% per month.

	July	August	September (difficult
Beg Cash Balance	$7,500	? (d)	? (k)
Cash Receipts	16,500	20,000	? (l)
Total cash avail.	? (a)	? (e)	40,000
Cash Disbursements
Payments inventory	? (b)	7,000	11,400
Wages paid	10,000	? (f)	12,000
S&A payments	8,000	9,000	? (m)
Interest payment	0	?(g)	?(n)
Total Disbursement	20,000	26,010	?(o)
Financing:
Cash surplus (shortage)	? (c)	? (h)	?(p)
Borrowing (repayment)	1,000	? (i)	(2,000)
Ending cash balance	5,000	? (j)	? (q)

Fill in the boxes:

Missing	Your answer	Missing	Your answer
A		J
B		K
C		L
D		M
E		N
F		O
G		P
H		Q
I

3.(a) Eddy Bower Industries has projected sales of its product for the next 6 months:

January	300 units
February	700 units
March	1,000 units
April	400 units
May	1,000 units
June	300 units

Each unit is sold at $10 per unit. The cost of goods sold is typically 40% of the months budgeted sales revenue. Eddy Bower tries to maintain a Finished Goods ending inventory equal to the 60% of next months cost of goods sold. January beginning inventories are expected to conform to company policy. Prepare a purchase budget for March, and April

3. (b) The selling and administrative expense budget of Rayan Corporation is based on budgeted unit sales, which are 4,000 units for February. The variable selling and administrative expense is $8 per unit. The budgeted fixed selling and administrative expense is $78,000 per month, which includes depreciation of $10,000 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the February selling and administrative expense budget should be:

4. Abbys cost accountant prepared the following static budget based on expected activity of 4,000 units for the May 2018 accounting period:

Sales Revenue $60,000

Variable Costs 32,000

Contribution Margin $28,000

Fixed Costs 20,000

Net Income $8,000

1. If Abbys sales manager were to prepare a flexible budget for expected activity of 5,000 units, budgeted net income on this flexible budget would be?

2. If Abby actually produced and sold 5,000 units at $18 each, what is the sales revenue activity/volume variance?

3. If Abby actually incurred the following costs during May 2018:

Sales Revenue $80,000

Variable Costs 35,000

Contribution Margin $45,000

Fixed Costs 12,000

Net Income $33,000

The flexible budget variance for:

1. Fixed costs:__________________________
2. Variable costs:_________________________

Indicate favorable / unfavorable variances for full credit