Oneida Company's operations began in August. August sales were $190,000 and purchases were $105,000. The beginning cash balance for September is $30,500. Oneida's owner approaches the bank for a $101,000 loan to be made on September 2 and repaid on November 30. The bank's loan officer asks the owner to prepare monthly cash budgets. Its budgeted sales, merchandise purchases, and cash payments for other expenses for the next three months follow. 

Budgeted                          Sep               Oct                Nov

Sales                           $230,000      $395,000      $500,000

Merch Purchases       240,000         200,000          200,000

Cash Payments

Salaries                        29,800           29,800             29,800

Rent                              9,000             9,000                9,000

Insurance                      4,700             4,700                  4,700

Repayment of loan                                                       101,000

Interest on loan            1,010                 1,010                 1,010

 

 

 

All sales are on credit where 73% of credit sales are collected in the month following the sale, and the remaining 27% is collected in the second month following the sale. All merchandise is purchased on credit; 83% of the balance is paid in the month following a purchase, and the remaining 17% is paid in the second month. 

Required: Prepare the following for the months of September, October, and November. 1. Schedule of cash receipts from sales. 2. Schedule of cash payments for direct materials. 3. Cash budget.

 

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Oneida Company Cash Budgets 1 Schedule of Cash Receipts from Sales Month Sales C... View the full answer