Use the data provided to make the Cash Collection budget. The format is provided just use the data and plug in the numbers from the data.
Thermium, inc, is preporing its budget for the coming year, 2023, The first step is to plan for the first quarter of that coming vear, The compony has gathered information from its managers in preparation of the budgeting process. Thermium likes to keep 10% of the next month's unit sales in ending irwentory. All sales are on account. 80% of the Accounts Recelvable are collected in the month of sale, and 20% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31,2022 , totaled $180,000 Thermium likes to heep B\% of the materials needed for the next month in its ending inventory. Raw Materials on December 31.2022, totaled 34,050 pounds. Payment for materials is paid 75% in the month of parchase, and 25% is pald in the month after puirchase. Accounts Payable on December 31, 2022, totaled $25,000. Thermium thes to keep bx of the materials needed for the next month in is ending imventory. Raw Materialt on December 31, 2022, totaled 34,050 pounds. Payment for materials is paid 75% in the month of purchase, and 25% is paid in the month after purchase. Accounts Payable on Decernter 31,2002 , totaled $25,000. other information The Cash balance on December 31,2022, totaled $100,000, but the Bark requires Thermium to maintain an end of month cash balance of at least $700,000 beginning on January 31,2023. Dividends are paid each month at the rate of $3,00 per share for 5,000 shares outsanding. The company has an open line of credit with Calypas Bank. The terms of the agreement requires borrowing to be in 51,000 increments at 124 interest. Thermium borrows on the first day of the borrowing month and repays on the las: day of the repayment month. 7. For the first quarter of 2023, prepare a cash collection budget. Instruction: The majority of the month sales are collected in the month of the sale. But there is a portion that is collected in the following month. Managers set-up budgets based on past experience so they can accurately predict what collections will occur in future months. Check figure - Total Cash Collections =$4,223,000 Thermium, inc, is preporing its budget for the coming year, 2023, The first step is to plan for the first quarter of that coming vear, The compony has gathered information from its managers in preparation of the budgeting process. Thermium likes to keep 10% of the next month's unit sales in ending irwentory. All sales are on account. 80% of the Accounts Recelvable are collected in the month of sale, and 20% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31,2022 , totaled $180,000 Thermium likes to heep B\% of the materials needed for the next month in its ending inventory. Raw Materials on December 31.2022, totaled 34,050 pounds. Payment for materials is paid 75% in the month of parchase, and 25% is pald in the month after puirchase. Accounts Payable on December 31, 2022, totaled $25,000. Thermium thes to keep bx of the materials needed for the next month in is ending imventory. Raw Materialt on December 31, 2022, totaled 34,050 pounds. Payment for materials is paid 75% in the month of purchase, and 25% is paid in the month after purchase. Accounts Payable on Decernter 31,2002 , totaled $25,000. other information The Cash balance on December 31,2022, totaled $100,000, but the Bark requires Thermium to maintain an end of month cash balance of at least $700,000 beginning on January 31,2023. Dividends are paid each month at the rate of $3,00 per share for 5,000 shares outsanding. The company has an open line of credit with Calypas Bank. The terms of the agreement requires borrowing to be in 51,000 increments at 124 interest. Thermium borrows on the first day of the borrowing month and repays on the las: day of the repayment month. 7. For the first quarter of 2023, prepare a cash collection budget. Instruction: The majority of the month sales are collected in the month of the sale. But there is a portion that is collected in the following month. Managers set-up budgets based on past experience so they can accurately predict what collections will occur in future months. Check figure - Total Cash Collections =$4,223,000
