Aqua Bravo Is a distributor of bottled water. For each item below, compute the amount of cash
Question:
Aqua Bravo Is a distributor of bottled water. For each item below, compute the amount of cash receipts or payments Aqua Bravo will budget for September. The solution to one item may depend on the answer to an earlier item.
a. The company expenses $5,500 per month for insurance on its float of delivery vehicles. The insurance premium is paid semiannually in September and March.
b. Management expects to sell 7,200 cases of water in August and 9,000 in September. Each case sells for $14. Cash sales average 30% of total sales, and credit sales make up the rest. On average, three-fourths of credit sales are collected in the month of sale, with the balance collected the following month.
c. The company pays commissions and other expenses of $4,400 per month.
d. A depreciation expense of $6,000 is recognized each month.
e. Aqua Bravo declares $102,000 in dividends to shareholders of record as of September 14
f. The payment date for the dividends declared in Part e is September 30.
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta