Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
15th Edition
ISBN: 9780134476315
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
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Chapter 4, Problem 4.8P
Learning Goal 4
P4-8 Cash receipts A firm has actual sales of $65,000 in April and $60,000 in May. It expects sales of $70,000 in June and $100,000 in July and in August. Assuming that sales are the only source of
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Exercise 1 (Schedule of expected Cash Collection)
Peak sales for Mideast Products, Inc., occur in August. The company's sales budget for the third quarter showing these peak sales is given below:
July August September Total
Budgeted sales ................ P600,000 P900,000 P500,000 P2,000.000
From past experience, the company has learned that 20% of a month’s sales are
collected in the month of sale, that another 70% is collected in the month following
sale, and that the remaining 10% is collected in the second month following sale.
Bad debts are negligible and can be ignored. May sales totaled P430,000 and
June sales totaled P540,000.
Required:
Prepare a schedule of expected cash collections from sales, by month
and in total, for the third quarter.
Assume that the company will prepare a budgeted statement of financial
position as of September 30. Compute the accounts receivable as of that
date.
Current Attempt in Progress
Swifty Industries expects credit sales for January, February, and March to be $176,000, $208,000, and $240,000, respectively. It is
expected that 75% of the sales will be collected in the month of sale, and 25% will be collected in the following month.
Compute cash collections from customers for each month.
Credit Sales
January
February
March
$
January
Collections from Customers
February
March
III. EXERCISES
Exercise 1 (Schedule of expected Cash Collection)
Peak sales for Mideast Products, Inc., occur in August. The company's sales
budget for the third quarter showing these peak sales is given below:
July
August
September
Total
Budgeted sales
P600,000
P900,000
P2,000,000
P2,000.000
From past experience, the company has learned that 20% of a month's sales are
collected in the month of sale, that another 70% is collected in the month following
sale, and that the remaining 10% is collected in the second month following sale.
Bad debts are negligible and can be ignored. May sales totaled P430,000 and
June sales totaled P540,000.
Required:
1. Prepare a schedule of expected cash collections from sales, bymonth
and in total, for the thirdquarter.
2. Assume that the company will prepare a budgeted statement of financial
position as of September 30. Compute the accounts receivable as ofthat
date.
Chapter 4 Solutions
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Ch. 4.1 - Prob. 4.1RQCh. 4.1 - Prob. 4.2RQCh. 4.2 - Briefly describe the first four modified...Ch. 4.2 - Describe the overall cash flow through the firm in...Ch. 4.2 - Prob. 4.5RQCh. 4.2 - 4-B Why is depreciation (as well as amortization...Ch. 4.2 - Prob. 4.7RQCh. 4.2 - Prob. 4.8RQCh. 4.2 - Prob. 4.9RQCh. 4.3 - Prob. 4.10RQ
Ch. 4.3 - Prob. 4.11RQCh. 4.3 - Prob. 4.12RQCh. 4.3 - What is the cause of uncertainty in the cash...Ch. 4.4 - Prob. 4.14RQCh. 4.5 - Prob. 4.15RQCh. 4.5 - Prob. 4.16RQCh. 4.6 - Prob. 4.17RQCh. 4.6 - What is the significance of the plug figure,...Ch. 4.7 - Prob. 4.19RQCh. 4.7 - Prob. 4.20RQCh. 4 - Opener-in-Review The chapter opener described a...Ch. 4 - Learning Goals 2, 3 ST4-1 Depreciation and cash...Ch. 4 - Prob. 4.2STPCh. 4 - Prob. 4.3STPCh. 4 - Prob. 4.1WUECh. 4 - Prob. 4.2WUECh. 4 - Learning Goal 3 E4-3 Determine the operating cash...Ch. 4 - Prob. 4.4WUECh. 4 - Learning Goal 5 E4-5 Rimier Corp. forecasts sales...Ch. 4 - Prob. 4.1PCh. 4 - Learning Goal 2 P4-2 Depreciation In early 2019,...Ch. 4 - Prob. 4.3PCh. 4 - Learning Goals 2, 3 P4-4 Depreciation and...Ch. 4 - Learning Goal 3 P4-5 Classifying inflows and...Ch. 4 - Prob. 4.6PCh. 4 - Learning Goal 4 P4-8 Cash receipts A firm has...Ch. 4 - Learning Goal 4 P4-9 Cash disbursements schedule...Ch. 4 - Learning Goal 4 P4-10 Cash budget: Basic Grenoble...Ch. 4 - Prob. 4.11PCh. 4 - Learning Goal 4 P4-12 Cash budget: Advanced The...Ch. 4 - Prob. 4.13PCh. 4 - Prob. 4.14PCh. 4 - Learning Goal 4 P4-15 Multiple cash budgets:...Ch. 4 - Learning Goal 5 P4-16 Pro forma income statement...Ch. 4 - Learning Goal 5 P4-17 Pro forma income statement:...Ch. 4 - Learning Goal 5 P4-18 Pro forma balance sheet:...Ch. 4 - Learning Goal 5 P4-19 Pro forma balance sheet...Ch. 4 - Learning Goal 5 P4-20 Integrative: Pro forma...Ch. 4 - Learning Goal 5 P4-21 Integrative: Pro forma...Ch. 4 - Prob. 4.22PCh. 4 - Prob. 1SE
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- Exercises Exercise 1 (Schedule of Expectęd Cash Collections) Peak sales for Mideast Products, Inc., occur in August. The company's sales budget for the third quarter showing these peak sales is given below: July P600,000 September P500,000 Total August P900,000 Budgeted sales P2,000,000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, that another 70% is collected in the month following sale, and that the remaining 10% is collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled P430,000 and June sales totaled P540,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. 2. Assume that the company will prepare a budgeted statement of financial position as of September 30. Compute the accounts receivable as of that date.arrow_forwardCh. 8 Expected Cash Disbursements Question Please solve and explain the following problem with formula typed out. Pastoria Enterprises has scheduled raw materials purchases of $100,000 in Janurary $130,000 in February and $150,000 in March. The company pays for 75% of its purchases in the month of purchases and 25% in the month after purchase. What is the expected cash disbursement for the month of February?arrow_forwardQuestion 4 Use the information provided below to prepare the following for January and February 2023: Debtors Collection Schedule Cash Budget INFORMATION The following information was provided by Intel Enterprises: 3. 5. The bank balance on 31 December 2022 is expected to be R40 000 (unfavourable). Credit sales are expected to be as follows. December 2022 R576 000 January 2023 Credit sales are normally collected as follows: 65% in the following month Credit sales usually make up 40% of the total sales. Cash sales make up the balance. Cash customers receive a 10% discount. R540 000 The rest is usually written off as bad debts. 30% in the month in which the transaction takes place, and these customers are entitled to a 5% discount. December 2022 Budgeted purchases of inventory are as follows. R1 000 000 February 2023 January 2023 R648 000 R800 000 February 2023 R920 000arrow_forward
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