Question
This question has two parts. Thank you in advance. 1A Compton Company expects the following total sales: Month Sales March $ 26,000 April $ 16,000
This question has two parts. Thank you in advance.
1A
Compton Company expects the following total sales:
Month | Sales | ||
March | $ | 26,000 | |
April | $ | 16,000 | |
May | $ | 28,000 | |
June | $ | 21,000 | |
The company expects 60% of its sales to be credit sales and 40% for cash. Credit sales are collected as follows: 30% in the month of sale, 70% in the month following the sale. The budgeted accounts receivable balance on May 31 is:
A. $11,760
B. $13,300
C. $18,450
D.$21,000
1B
Compton Company budgeted the following transactions for April Year 2:
Sales (75% collected in month of sale) | $ | 330,000 | |
Cash Operating Expenses | 118,000 | ||
Cash Purchases of Investment | 88,000 | ||
Cash Payment of Debt | 28,000 | ||
Depreciation on Operating Assets | 38,000 | ||
The beginning cash balance was $76,000. The company desires to have a $129,000 ending cash balance. The surplus (or shortage) of cash before considering any borrowings in April would be:
A. $79,000 surplus
B. $79,000 shortage
C. $39,500 shortage
D. There is no cash surplus or shortage.
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