Hurtt's Java Seeds is an independent roaster of specialty coffee beans. During March, the company plans...

 

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Hurtt's Java Seeds is an independent roaster of specialty coffee beans. During March, the company plans to sell 10,000 pounds of beans at $12.00 per pound. Internet sales account for 50 percent of total sales and are paid for by customers when they place their orders. Of the remaining 50 percent, three-fifths are paid for in the month of sale and two-fifths in the month following the sale. In February, roasted coffee bean sales are expected to total $99,600. Hurtt's pays for 40 percent of its green coffee beans in the month of purchase and the remaining 60 percent in the month following the purchase. (Refer to your answer for Unit 5.3 Exercise for March purchases.) February's purchases of green coffee beans are expected to total $25,000. Variable selling and administrative expenses are 20 percent of sales, and fixed administrative expenses are $30,000 per month. Both are paid in the month incurred, as are direct labor costs and manufacturing overhead. In March, Hurtt's must make a $30,000 payment on its long-term loan, of which $5,000 is interest. At the end of February, Hurtt's cash balance is expected to be $14,000. The company must maintain a minimum cash balance of $12,000 as a condition of a long-term loan. Any cash required to maintain the minimum balance can be borrowed in $1,000 increments at a 12 percent annual interest rate. Interest is paid only when principal is repaid. However, it is accrued at the end of every month. Required 1. Prepare Hurtt's cash receipts budget for March. 2. Prepare Hurtt's cash payments for purchases budget for March. 3. Prepare Hurtt's cash budget for March. Hurtt's Java Seeds is an independent roaster of specialty coffee beans. During March, the company plans to sell 10,000 pounds of beans at $12.00 per pound. Internet sales account for 50 percent of total sales and are paid for by customers when they place their orders. Of the remaining 50 percent, three-fifths are paid for in the month of sale and two-fifths in the month following the sale. In February, roasted coffee bean sales are expected to total $99,600. Hurtt's pays for 40 percent of its green coffee beans in the month of purchase and the remaining 60 percent in the month following the purchase. (Refer to your answer for Unit 5.3 Exercise for March purchases.) February's purchases of green coffee beans are expected to total $25,000. Variable selling and administrative expenses are 20 percent of sales, and fixed administrative expenses are $30,000 per month. Both are paid in the month incurred, as are direct labor costs and manufacturing overhead. In March, Hurtt's must make a $30,000 payment on its long-term loan, of which $5,000 is interest. At the end of February, Hurtt's cash balance is expected to be $14,000. The company must maintain a minimum cash balance of $12,000 as a condition of a long-term loan. Any cash required to maintain the minimum balance can be borrowed in $1,000 increments at a 12 percent annual interest rate. Interest is paid only when principal is repaid. However, it is accrued at the end of every month. Required 1. Prepare Hurtt's cash receipts budget for March. 2. Prepare Hurtt's cash payments for purchases budget for March. 3. Prepare Hurtt's cash budget for March.

Answer rating: 100% (QA)

1 Cash Receipts Budget March Internet sales 10000 pounds 1200 per pound 120000 Cash sales 3000 pound... View the full answer