Amber Furniture has projected sales of its product for the next six months as follows. January 100
Question:
Amber Furniture has projected sales of its product for the next six months as follows.
January | 100 units |
February | 120 units |
March | 250 units |
April | 170 units |
May | 125 units |
June | 110 units |
The product sells for $35 each. Credit sales account for 25% of sales; 50% are collected in the month, and the remainder is collected in the following month.
All expenses and purchases are paid for in the same month they are incurred as follows:
Operating expenses are expected to be $1,700 each month.
Purchases are expected to be 25% of the expected sales each month.
Required:
a. Prepare a schedule of expected cash collections for the second quarter. (10 marks)
b. Prepare a cash Budget for the second quarter, assuming that Amber ended the first quarter with a cash balance of $4,000.
Accounting Business Reporting For Decision Making
ISBN: 9780730369325
7th Edition
Authors: Jacqueline Birt, Keryn Chalmers, Suzanne Maloney, Albie Brooks, Judy Oliver, David Bond