{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-05-27T19:13:23-04:00", "answer_date": "2024-05-27 19:13:23", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "1797232", "url": "\/study-help\/questions\/westex-products-is-a-wholesale-distributor-of-industrial-cleaning-products-1797232", "question_creation_date_js": "2024-05-27T19:13:23-04:00", "question_creation_date": "May 27, 2024 07:13 PM", "meta_title": "[Solved] Westex Products is a wholesale distributo | SolutionInn", "meta_description": "Answer of - Westex Products is a wholesale distributor of industrial cleaning products. When the treasurer of Westex Products appr | SolutionInn", "meta_keywords": "westex,products,wholesale,distributor,industrial,cleaning,treasurer,approached,company,s,bank,late", "question_title_h1": " Westex Products is a wholesale distributor of industrial cleaning products. When the treasurer of Westex Products approached the company's bank late in the current", "question_title": " Westex Products is a wholesale distributor of industrial cleaning products. When", "question_title_for_js_snippet": "Westex Products is a wholesale distributor of industrial cleaning products When the treasurer of Westex Products approached the company's bank late in the current year seeking short term financing, he was told that money was very tight and that any borrowing over the next year would have to be supported by a detailed statement of cash collections and disbursements The treasurer also was told that it would be very helpful to the bank if borrowers would indicate the quarters in which they would be needing funds, as well as the amounts that would be needed, and the quarters in which repayments could be made Because the treasurer is unsure as to the particular quarters in which bank financing will be needed, he has assembled the following Information to assist in preparing a detailed cash budget a Budgeted sales and merchandise purchases for next year, as well as actual sales and purchases for the last quarter of the current year, are Current Year Fourth quarter actual Next year First quarter estimated Second quarter estimated Third quarter estimated Fourth quarter estimated Sales $ 200,000 Merchandise Purchases 5 126,000 $300,000 $400,000 $ 500,000 $200,000 $186,000 $ 246,000 5305,000 $126,000 b All sales are on account The company normally collects 65 of a quarter's sales before the quarter ends and another 33 in the following quarter The remainder is uncollectible This pattern of collections is now being experienced in the current year's fourth quarter actual date c Eighty percent of a quarter's merchandise purchases are paid for within the quarter The remainder is paid for in the following quarter d Selling and administrative expenses for next year are budgeted at $50,000 per quarter plus 15 of sales Of the fixed amount $20,000 each quarter is depreciation e The company will pay $10,000 in dividends each quarter f Land purchases of $75,000 will be made in the second quarter, and purchases of $48,000 will be made in the third quarter These purchases will be for cash g The Cash account contained $10,000 at the end of the current year The treasurer feels that this represents a minimum balance that must be maintained h The company's bank allows borrowing in increments of $1,000 at the beginning of each quarter, up to a total loan balance of $100,000 The interest rate on these loans is 2 5 per quarter and for simplicity we will assume that interest is not compounded The company would, as far as it is able, repay the loan plus accumulated interest at the end of the year At present, the company has no loans outstanding Required 1 Calculate the expected cash collections by quarter and in total for next year 2 Calculate the expected cash disbursements for merchandise purchases by quarter and in total for next year 3 Calculate the expected cash disbursements for selling and administrative expenses, by quarter and in total for next year 4 Prepare a cash budget by quarter and in total for next year ", "question_description": "\"image\"image\"image\"image", "transcribed_text": "Westex Products is a wholesale distributor of industrial cleaning products. When the treasurer of Westex Products approached the company's bank late in the current year seeking short-term financing, he was told that money was very tight and that any borrowing over the next year would have to be supported by a detailed statement of cash collections and disbursements. The treasurer also was told that it would be very helpful to the bank if borrowers would indicate the quarters in which they would be needing funds, as well as the amounts that would be needed, and the quarters in which repayments could be made. Because the treasurer is unsure as to the particular quarters in which bank financing will be needed, he has assembled the following Information to assist in preparing a detailed cash budget: a. Budgeted sales and merchandise purchases for next year, as well as actual sales and purchases for the last quarter of the current year, are: Current Year: Fourth quarter actual Next year First quarter estimated Second quarter estimated Third quarter estimated Fourth quarter estimated Sales $ 200,000 Merchandise Purchases 5 126,000 $300,000 $400,000 $ 500,000 $200,000 $186,000 $ 246,000 5305,000 $126,000 b. All sales are on account. The company normally collects 65% of a quarter's sales before the quarter ends and another 33% in the following quarter. The remainder is uncollectible. This pattern of collections is now being experienced in the current year's fourth- quarter actual date. c. Eighty percent of a quarter's merchandise purchases are paid for within the quarter. The remainder is paid for in the following quarter. d. Selling and administrative expenses for next year are budgeted at $50,000 per quarter plus 15% of sales. Of the fixed amount. $20,000 each quarter is depreciation. e. The company will pay $10,000 in dividends each quarter. f Land purchases of $75,000 will be made in the second quarter, and purchases of $48,000 will be made in the third quarter. These purchases will be for cash. g. The Cash account contained $10,000 at the end of the current year. The treasurer feels that this represents a minimum balance that must be maintained. h. The company's bank allows borrowing in increments of $1,000 at the beginning of each quarter, up to a total loan balance of $100,000. The interest rate on these loans is 2.5% per quarter and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the year. At present, the company has no loans outstanding. Required: 1. Calculate the expected cash collections by quarter and in total for next year. 2. Calculate the expected cash disbursements for merchandise purchases by quarter and in total for next year. 3. Calculate the expected cash disbursements for selling and administrative expenses, by quarter and in total for next year. 4. Prepare a cash budget by quarter and in total for next year.", "related_book": { "title": "Financial Accounting", "isbn": "1133952410, 9781133952411, 978-1133952428", "edition": "12th Edition", "authors": "Warren, Reeve, Duchac", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/114.jpg", "uri": "\/textbooks\/financial-accounting-12th-edition-114", "see_more_uri": "" }, "free_related_book": { "isbn": "979-8374621334", "uri": "\/textbooks\/summary-of-crypto-wars-faked-deaths-missing-billions-and-industry-disruption-by-erica-stanford-1st-edition-979-8374621334-169264", "name": "Summary Of Crypto Wars Faked Deaths Missing Billions And Industry Disruption By Erica Stanford", "edition": "1st Edition" }, "question_posted": "2024-05-27 19:13:23", "see_more_questions_link": "\/study-help\/questions\/business-general-management-2023-February-20", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/a-heat-engine-cycle-is-executed-with-ammonia-in-the", "description": "A heat engine cycle is executed with ammonia in the saturation dome. 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