Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use the following Information to prepare a cash budget for December a. The cash balance on December 1 is $41,200. b. Actual sales for October

image text in transcribed

image text in transcribed

Use the following Information to prepare a cash budget for December a. The cash balance on December 1 is $41,200. b. Actual sales for October and November and expected sales for December are as follows: Cash sales Sales on account October $ 75, 400 $ 490.000 November $ 82.400 $544.000 December $ 97. 200 $ 629,000 Sales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible. c. Purchases of Inventory will total $366,000 for December. Thirty percent of a month's Inventory purchases are paid during the month of purchase. The accounts payable remaining from November's Inventory purchases total $183.000, all of which will be paid in December d. Selling and administrative expenses are budgeted at $472,000 for December. Of this amount. $60.000 is for depreciation. e. A new web server for the Marketing Department costing $96.000 will be purchased for cash during December, and dividends totaling $11,500 will be paid during the month. f. The company maintains a minimum cash balance of $20,000. An open line of credit is available from the company's bank to Increase its cash balance as needed. Required: 1. Calculate the expected cash collections for December. 2. Calculate the expected cash disbursements for merchandise purchases for December 3. Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any Interest will not be pald until the following month. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 1. Calculate the expected cash collections for December 2. Calculate the expected cash disbursements for merchandise purchases for December Total cash collections Total cash disbursements Res 1 and 2 Prepare a cash budget for December. Indicate in the financing section any the month. Assume that any interest will not be paid until the following moi Ashton Company Cash Budget For the Month of December Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Payments to suppliers for inventory Selling and administrative expenses New web server Dividends paid Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance

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_2

Step: 3

blur-text-image_3

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

Fundamental Accounting Principles

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

20th Edition

1259157148, 78110874, 9780077616212, 978-1259157141, 77616219, 978-0078110870

More Books

Students also viewed these Accounting questions

Question

4. What are some leadership characteristics?

Answered: 1 week ago