Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You hmve been anked to prepare a December cash budget for Ashton Campeny, a distritider of eritcite equipmont. The foliowing information is avalleble obout the

image text in transcribed
image text in transcribed
You hmve been anked to prepare a December cash budget for Ashton Campeny, a distritider of eritcite equipmont. The foliowing information is avalleble obout the company's operations: a. The cash balance on December 1 is $53,400. b. Actual soles for October and November and expected sales for Decomber are as follewi: Sales on account are collected over a three-menth period as foliows: 20 i. collected in the month of sate, 60 so coliected in the month following sale, and 18% collected in the second month following sale. The remaining 2 the is uncollectibte. c. Purchases of inventory will total $341,000 for December. Thirfy percent of a month's inventory purchases are pald during the month of purchase. The accounts payable remaining from November's inventory purchases total $165,000. all of which will be paid in December; d. Selling and administrative expenses are budgeted at $516,000 for December. Of this amount, $94,900 is for depreciation. e, A new web server for the Marketing Department costing $121,500 will be purchased for cash during December, and dividends totaling $13,000 will be paid during the month. f. The company maintains a minimum cash balance of $20,000. An open line of credit is avaitable from the compary's bank to increase its cash balance as needed. Required: 1. Calculate the expected cash collections for Decembet. 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 manth. Assume that any interest will not be paid until the following month. Complete this question by entering your answers in the tabs below. 1. Calculate the expected cash collections for December. 2. Calculate the expected cash disbursements for merchandise purchases for December. Docember. fotaling $13,000 will be paid duting the morith. increase its cash balance as needect. Requlred: 1. Calculate the expected cash collections for December, 2. Calculate the expected cash disbursements for merchandise purchases for Decemibec that any interest will not be paid until the following month. Complete this question by entering your answers in the tabs below. 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 paid until the following month

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

Intermediate Accounting

Authors: James D. Stice, Earl K. Stice, Fred Skousen

17th Edition

032459237X, 978-0324592375

More Books

Students also viewed these Accounting questions

Question

4. LO11-4 Identify the methods for sales management.

Answered: 1 week ago