The CPL company is landing trading company that sells only one product for 30 $ which cost
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Question:
The CPL company is landing trading company that sells only one product for 30 $ which cost the company 20$ . budget sales for next year are equal to 720,000$. the following sale estimate are used for preparing in January budget.
Month | Nov | Dec | Jan | Feb |
Sales revenue | 42,000 | 45,000 | 48,000 | 51,000 |
Account balance at January 1 are follows:
Cash | Merchandise inventory | Accounts Receivable (Sales) | Accounts Payable (Purchases) |
18,900 | 20,000 | 23,000 | 15,500 |
- End of month inventory must be 50%of the budgeted sales in units for the next .
- Sales on account and collected over two month period with 70% collected in the month of sale and 27% in the month following the sale .
- the company pays 60 % of its purchase in the month of purchase and the reminder in the following month.
- Budgeted selling and administrative expense (excluding bad debts) for the year are estimated to be 180,000$ of which ½ its fixed expense (inclusive 21,000$ annual depreciation).
- The order selling and administrative expense vary with sales. Expenses are paid during the month incurred.
- Required
- 1. Calculate the expected cash collection for January?
- 2. The expected cash payments for January?
- 3. Prepare a cash budget for January, as follows .
- Cash balance, beginning
- Add cash collections.
- Total cash available
- Less cash payments
- Merchandise
- Selling and administrative
- Cash balance, ending
Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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