Below is selected information for ABC Company Inc. The table summarizes the various operating budgets for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Below is selected information for ABC Company Inc. The table summarizes the various operating budgets for the quarter ending March 31, 2023. Assume that all sales are on account. 75% of the accounts receivable are collected in the month of sale and 25% are collected in the month after sale. On 12/31/2022, the balance in Accounts Receivable was $306,300. Assume that all purchases of direct materials are on account. 55% of the credit purchases are paid in the month of purchase and 45% are paid in the month after purchase. On 12/31/2022, the balance in Accounts Payable was $120,595. Included in the monthly fixed factory overhead costs is $16,800 in depreciation. Included in the monthly fixed selling and administrative costs is $2,500 in depreciation. The cash balance on December 31, 2022, is $100,500. Beginning on January 31, 2023, management wants to maintain a cash balance of at least $800,000. Each month, ABC will pay a $12,500 dividend. ABC plans on purchasing a $500,000 machine in February. ABC has an open line of credit with Bank of America. The rate is 8%. Per the agreement, borrowing and repayments must be in $1,000 increments. ABC will borrow on the first day of the month in which it expects a deficiency, and it will repay as much as it can on the last day of the month in which it has funds that exceed the required minimum cash balance. Interest is paid only when the principal or a fraction thereof is repaid. Except for the $1,000 borrowing and repayment increments, round all computations to the nearest dollar. ABC Company Inc. Selected Data For the Quarter Ending March 31, 2023 Total budgeted sales Total budgeted cost of direct materials purchases Total budgeted cost of direct labor Total budgeted factory overhead Total budgeted selling and admnistrative expense January February March $1,356,000 $1,350,000 $1,392,000 $ 169,418 $ 169,579 $ 176,051 $ 515,048 $ 180,720 $ 180,560 $ 187,040 $548,320 $ 97,860 $ 97,830 $ 99,045 $ 294,735 279,500 $ 828,100 $ 274,700 $ 273,900 $ Quarter $4,098,000 Required 1. Prepare a schedule of expected cash collections from customers. 2. Prepare a schedule of expected cash payments for materials purchases. 3. Prepare a cash budget (use the format below). Below is selected information for ABC Company Inc. The table summarizes the various operating budgets for the quarter ending March 31, 2023. Assume that all sales are on account. 75% of the accounts receivable are collected in the month of sale and 25% are collected in the month after sale. On 12/31/2022, the balance in Accounts Receivable was $306,300. Assume that all purchases of direct materials are on account. 55% of the credit purchases are paid in the month of purchase and 45% are paid in the month after purchase. On 12/31/2022, the balance in Accounts Payable was $120,595. Included in the monthly fixed factory overhead costs is $16,800 in depreciation. Included in the monthly fixed selling and administrative costs is $2,500 in depreciation. The cash balance on December 31, 2022, is $100,500. Beginning on January 31, 2023, management wants to maintain a cash balance of at least $800,000. Each month, ABC will pay a $12,500 dividend. ABC plans on purchasing a $500,000 machine in February. ABC has an open line of credit with Bank of America. The rate is 8%. Per the agreement, borrowing and repayments must be in $1,000 increments. ABC will borrow on the first day of the month in which it expects a deficiency, and it will repay as much as it can on the last day of the month in which it has funds that exceed the required minimum cash balance. Interest is paid only when the principal or a fraction thereof is repaid. Except for the $1,000 borrowing and repayment increments, round all computations to the nearest dollar. ABC Company Inc. Selected Data For the Quarter Ending March 31, 2023 Total budgeted sales Total budgeted cost of direct materials purchases Total budgeted cost of direct labor Total budgeted factory overhead Total budgeted selling and admnistrative expense January February March $1,356,000 $1,350,000 $1,392,000 $ 169,418 $ 169,579 $ 176,051 $ 515,048 $ 180,720 $ 180,560 $ 187,040 $548,320 $ 97,860 $ 97,830 $ 99,045 $ 294,735 279,500 $ 828,100 $ 274,700 $ 273,900 $ Quarter $4,098,000 Required 1. Prepare a schedule of expected cash collections from customers. 2. Prepare a schedule of expected cash payments for materials purchases. 3. Prepare a cash budget (use the format below).
Expert Answer:
Answer rating: 100% (QA)
a Schedule of expected cash collections it indicates the time frame within which cash receipts are expected from customers b Schedule of cash payments it indicates the expected cash payments from purc... View the full answer
Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these general management questions
-
In his preliminary cash budget, Barnes has assumed that all sales are collected and, thus, that SKI has no bad debts. Is this realistic? If not, how would bad debts be dealt with in a cash budgeting...
-
At Morris Mart Inc., all sales are on account. Mary Morris-Manning is responsible for mailing invoices to customers, recording the amount billed, opening mail, and recording the payment. Mary is very...
-
Below is selected information from Tripe Corp: Return on Common Equity for Year 1 is: A) 19.0% B) 19.60% C) 21.08% D)26.03% ear ear Net operating assets /common equity Net operating profit margin...
-
Burke Fabricators completed two jobs in June. Burke Fabricators recorded the following costs assigned to the jobs by the companys activity-based costing system: Job 622 required 2,400 parts, 77,500...
-
List the supporting documents and records the auditor will examine in a typical payroll audit in which the primary objective is to detect fraud.
-
Brandon Company produces and sells a product that has variable costs of $9 per unit and fixed costs of $110,000 per year. 1. Compute the unit cost at a production and sales level of 10,000 units per...
-
Beta Supply completed the following selected transactions during the year: Requirements 1. Open T-accounts for Allowance for Uncollectible Accounts and Uncollectible Accounts Expense. These accounts...
-
SCHEDULE OF COST OF GOODS MANUFACTURED Prepare a schedule of cost of goods manufactured for Tomas Company for the year ended June 30, 20-2. Information to prepare the schedule is as follows: Work in...
-
(1 point) Differentiate y = sin x 25 y' = D
-
A division of your company purchased a large quantity of new desktop computers during the current fiscal year. An internal audit manager has asked you to audit the process used to acquire the...
-
Your company is considering investing in a new product line. Initial Investment in the product line is expected to be 1.2 million dollars. You expect the first months sales to be 900 units per month...
-
Explain why non-current investments are not depreciated.
-
Identify the true statement about OOAD. i. It provides a model of the system based on the users requirements. ii. It provides abstraction from the underlying complexity of the system. iii. It allows...
-
What is the justification for reporting deferred income under the category of liability?
-
List three questions that users might ask about depreciation of tangible fixed assets.
-
Identify the true statement about the UML and OOAD processes. i. The UML is designed to work only with traditional OOAD processes. ii. The UML is designed to work with use case driven processes. iii....
-
Kyle received a loan of $8,000 at 4.32% compounded semi-annually from a credit union to use as working capital for his business. He had to make semi-annual payments for a period of 4 years to settle...
-
Cassandra Casey operates the Futuristic Antique Store. She maintains subsidiary ledgers for accounts payable and accounts receivable. She presents you with the following information for October 2019:...
-
The following cost data pertain to the operations of Montgomery Department Stores, Inc., for the month of July. Corporate legal office salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . ....
-
What is a relevant cost?
-
Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided...
-
What material is contained in a Statement of Auditing Standards?
-
What are the rules on sending out accounts in summary form?
-
What documents are issued by the APB?
Study smarter with the SolutionInn App