Please do not give solution in image format thanku Golf Company has accumulated the following budget information for the two months of the coming fiscal year:MarchApril$625,000 $710,000260,000425,00050,80060,800The company expects to sell about 25% of its merchandise for cash. Of sales on account, 60% are collected in themonth of the sale, and the remainder in the month following the sale.Sales.Manufacturing costsSelling and administrative expenses65% of the manufacturing costs are paid in the month in which they are incurred, and the balance in the followingmonth.Depreciation, insurance, and property taxes represent $12,000 of the monthly selling and administrative expenses.Insurance is paid in May, and property taxes are paid yearly in September. Of the remainder of the selling andadministrative expenses, one-half are to be paid in the month in which they are incurred and the balance in the followingmonth.Capital additions of $250,000 are paid in April.A $12,000 installment on income taxes is to be paid in MarchCurrent assets as of March 1 are composed of cash of $75,000 and accounts receivable of $90,000.Current liabilities as of March 1 our accounts payable of $200,000 ($180,000 for materials purchases and $20,000 foroperating expenses).Management desires to maintain a minimum cash balance of $30,000.REQUIRED:Prepare a monthly cash budget for March and April. Show Cash Collections on account and Cash Payments onaccount separately.

Cash are important in the business and companies make cash budget so that there is no deficiency of…

April $710,000 Manufacturing costs 425,000 Selling and administrative expenses 60,800 The company expects to sell about 25% of its merchandise for cash. Of sales on account, 60% are collected in the month of the sale, and the remainder in the month following the sale. 65% of the manufacturing costs are paid in the month in which they are incurred, and the balance in the following Sales. of the coming fiscal year March $625,000 260,000 50,800

April $710,000 Manufacturing costs 425,000 Selling and administrative expenses 60,800 The company expects to sell about 25% of its merchandise for cash. Of sales on account, 60% are collected in the month of the sale, and the remainder in the month following the sale. 65% of the manufacturing costs are paid in the month in which they are incurred, and the balance in the following Sales. of the coming fiscal year March $625,000 260,000 50,800

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 5PB: Cash budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for...

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Pilsner Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account: Pilsner typically pays 25% on account in the month of billing and 75% the next month. Required: 1. How much cash is required for payments on account in May? 2. How much cash is expected for payments on account in June?
Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the follow sales: In Shalimars experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are 4,900,000 and for the fourth quarter of the current year are 6,850,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. 2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. 3. What if the recession led Shalimars top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.
Cash budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent 50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of 40,000, marketable securities of 75,000, and accounts receivable of 300,000 (60,000 from July sales and 240,000 from August sales). Sales on account for July and August were 200,000 and 240,000, respectively. Current liabilities as of September 1 include 40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 55,000 will be made in October. Bridgeports regular quarterly dividend of 25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of 50,000. Instructions Prepare a monthly cash budget and supporting schedules for September, October, and November. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
Cash budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the sale and the remainder the following month (second month after sale). Depreciation, insurance, and property tax expense represent 12,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in February, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of June 1 include cash of 42,000, marketable securities of 25,000, and accounts receivable of 198,000 (150,000 from May sales and 48,000 from April sales). Sales on account in April and May were 120,000 and 150,000, respectively. Current liabilities as of June 1 include 13,000 of accounts payable incurred in May for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 24,000 will be made in July. Mercury Shoes regular quarterly dividend of 15,000 is expected to be declared in July and paid in August. Management desires to maintain a minimum cash balance of 40,000. Instructions Prepare a monthly cash budget and supporting schedules for June, July, and August. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
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