1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
lakkis [162]
3 years ago
13

The Peoria Supply Company sells for $30 one product that it purchases for $20. Budgeted sales in total dollars for next year are

$720,000. The sales information needed for preparing the July budget follows:
Month Sales Revenue
May $30,000
June 42,000
July 51,000
August 54,000

Account balances at July 1 include these:

Cash $20,000
Merchandise inventory 18,000
Accounts receivable (sales) 23,000
Accounts payable (purchases) 12,000

The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 50 percent of the budgeted sales in units for the next month. A 2 percent cash discount on sales is allowed if payment is made during the month of sale. Experience indicates that 50 percent of the billings will be collected during the month of sale, 40 percent in the following month, 8 percent in the second following month, and 2 percent will be uncollectible. Total budgeted selling and administrative expenses (excluding bad debts) for the fiscal year are estimated at $180,000 , of which one-half is fixed expense (inclusive of a $20,000 annual depreciation charge). Fixed expenses are incurred evenly during the year. The other selling and administrative expenses vary with sales. Expenses are paid during the month incurred.

Required:
a. Prepare a schedule of estimated cash collections for July.
b. Prepare a schedule of estimated July cash payments for purchases.
c. Prepare schedules of July selling and administrative expenses, separately identifying those requiring cash disbursements.
Business
1 answer:
Alborosie3 years ago
8 0

Answer:

The Peoria Supply Company

a. Schedule of Estimated Cash Collections:

Cash collections:                   July      

50% sales month              $25,500

less 2% cash discount             (510)

40% following month          16,800

8% second month                2,400

Total collections               $44,190

b. A Schedule of Estimated July Cash Payments for Purchases

                                      June         July

Sales                         $42,000    $51,000

Ending inventory         18,000*    27,000

Beginning inventory   21,000      18,000*

Estimated Purchases 39,000    60,000

Payment for purchases:

50% purchase month              $30,000

50% following month                 19,500

Total payment for purchases $49,500

c. Selling and administrative expenses

Non-Cash expenses:

Depreciation expense $1,667

Cash disbursements:

Other fixed costs          5,333

Variable costs               6,375

Total costs                 $13,375

Explanation:

a) Data and Calculations:

Selling price per product = $30

Purchase cost per product = $20

Total sales dollars for next year = $720,000

Month Sales Revenue

May         $30,000

June          42,000

July            51,000

August     54,000

July 1:

Cash balance = $20,000

Merchandise inventory $18,000

Accounts receivable (sales) 23,000

Accounts payable (purchases) 12,000

Ending inventory = $27,000 ($54,000 * 50%)

Ending inventory = 50% of next month's budgeted sales

Selling and administrative expenses (excluding bad debts) for the year = $180,000

Fixed costs = $90,000

Depreciation    20,000

Cash fixed costs = $70,000

Monthly fixed costs = $5,833

Variable costs = $90,000

Variable costs per sales dollars = $90,000/$720,000 = $0.125

Cash variable cost for July $0.125 * $51,000 = $6,375

a. Schedule of Estimated Cash Collections:

Cash collections:                May        June         July       August

                                      $30,000 $42,000   $51,000  $54,000

50% sales month             15,000    21,000    25,500     27,000

less 2% cash discount        (300)       (420)        (510)         (540)

40% following month                                      16,800     20,400

8% second month                                            2,400        3,360

2% Uncollectible

You might be interested in
Zoe runs a flower shop. She recently made some changes so that one employee answers phones and completes the order and payment p
tresset_1 [31]

Answer:E. Task Identity

Explanation: Task identity is a term used to describe the distribution of the various stages of a task to separate individuals in order for each person to have a clear focus on his or her own task.

Task Identity is one of the five parts of job characteristics which includes,skill variety, task identity, task significance, autonomy and feedback. Task identity ensures that each person is identified According to the task he or she is involved in.

7 0
3 years ago
How did lax security impact target's sales revenue and profit performance?
Salsk061 [2.6K]
Target posted final quarter income of $21.5 billion. This brought income of  about 81 pennies for every share. But the examiner <span>agreement was calling for income of 80 pennies for each share</span>. So, with 81 pennies for every share the examiner agreement was beated.
5 0
3 years ago
As an eighth grader, Marliss wins an art competition, and her prize is one thousand dollars. She wants to invest the money for h
diamong [38]
Marliss will want to invest her money in a savings bond to help her save money for college. The correct answer is A. 
8 0
3 years ago
Jones Corp. reported current assets of $191,000 and current liabilities of $136,000 on its most recent balance sheet. The curren
stiks02 [169]

Answer:

acid-test ratio 1,4044

Explanation:

We are asked for a variation ofthe current ratio

whie current ratio is determinate like:

\frac{current\: assets }{current\: liab}

the acid-test will remove inventory from the current assets, leaving only cash, marketable securities and accounts receivables considered for the calculations:

191,000 current assets - 85,000 inventory = 106,000

136,000 current liabilities

191,600 / 136,000  = 1,4044

7 0
3 years ago
According to MACRS tax rate table, which of the following classes uses straight-line depreciation?
Vinil7 [7]
The answer is Residential rental property
8 0
3 years ago
Other questions:
  • A(n) _____ is a form of business ownership that offers both restricted responsibility to its owners and flexible tax treatment.
    15·1 answer
  • Which of the following statements are correct regarding the method of valuation by comparables? (Choose 2). 1. A firm's market v
    9·1 answer
  • One of the steps the U.S. Sentencing Commission delineated companies must implement to demonstrate due diligence is that a firm
    10·1 answer
  • Accrual accounting is used because Group of answer choices cash flows are considered less important. it provides a better indica
    8·1 answer
  • Helen is purchasing a home for $150,000 and provides a $2,500 earnest money check to the seller. She's financing the transaction
    12·1 answer
  • In your opinion ,what is the correct priority in making a business decision?
    11·2 answers
  • When Wells Fargo employees fraudulently opened customer accounts in order to meet extremely high sales quotas, rehabilitating th
    15·1 answer
  • Distributions of cash or other resources by a business to its stockholders are called:
    5·1 answer
  • Inventory records for Dunbar Incorporated revealed the following: Date Transaction Number of Units Unit Cost Apr. 1 Beginning in
    8·1 answer
  • To maximize income from consumers, distributors time their tentpole theatrical releases according to
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!