The Warrenburg Antique Mall expects to make purchases of direct material in the first quarter of 2024 as shown. Purchases in December 2023 are expected to be $92,000. The company expects that 60 percent of a month's purchases will be paid in the month of purchase and 40 percent will be paid in the following month. Estimate cash disbursements related to purchases for each month of the first quarter of 2024. Budgeted purchases Payment on material purchased prior month Payment on material purchased this month Total cash payment A: D: G: B: E: H: 2023 Dec. $92,000 Answer Jan. $95,000 A D G C: F: 1: 2024 Feb. $120,000 B E H Mar. $85,000 C F

The Warrenburg Antique Mall expects to make purchases of direct material in the first quarter of 2024 as shown. Purchases in December 2023 are expected to be $92,000. The company expects that 60 percent of a month's purchases will be paid in the month of purchase and 40 percent will be paid in the following month. Estimate cash disbursements related to purchases for each month of the first quarter of 2024. Budgeted purchases Payment on material purchased prior month Payment on material purchased this month Total cash payment A: D: G: B: E: H: 2023 Dec. $92,000 Answer Jan. $95,000 A D G C: F: 1: 2024 Feb. $120,000 B E H Mar. $85,000 C F

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 6BE: Cash budget Pasadena Candle Inc. pays 40% of its purchases on account in the month of the purchase...

See similar textbooks

Similar questions

Cash budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent 50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of 40,000, marketable securities of 75,000, and accounts receivable of 300,000 (60,000 from July sales and 240,000 from August sales). Sales on account for July and August were 200,000 and 240,000, respectively. Current liabilities as of September 1 include 40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 55,000 will be made in October. Bridgeports regular quarterly dividend of 25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of 50,000. Instructions Prepare a monthly cash budget and supporting schedules for September, October, and November. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
Cash budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the sale and the remainder the following month (second month after sale). Depreciation, insurance, and property tax expense represent 12,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in February, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of June 1 include cash of 42,000, marketable securities of 25,000, and accounts receivable of 198,000 (150,000 from May sales and 48,000 from April sales). Sales on account in April and May were 120,000 and 150,000, respectively. Current liabilities as of June 1 include 13,000 of accounts payable incurred in May for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 24,000 will be made in July. Mercury Shoes regular quarterly dividend of 15,000 is expected to be declared in July and paid in August. Management desires to maintain a minimum cash balance of 40,000. Instructions Prepare a monthly cash budget and supporting schedules for June, July, and August. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
Byanong prepares the cash budget for the month of November 2022. Estimates for the month include the following: Sales P250,000 Gross profit rate 50% Decrease in inventories P 10,000 Increase in accounts payable 15,000 What are the estimated cash disbursements for inventory in November 2022?
From the following information, prepare a monthly cash budget for the three months ending 31st December 2023. Month June July August September October November December Materials Wages 1,800 650 2,000 750 2,400 750 2,250 750 2.300 800 2,500 2,600 900 1,000 The credit terms are as follows: 10% of sales are in cash. 3 months to debtors. 2 months from Creditors. Sales 3,000 3,250 3,500 3,750 4,000 4,250 4,500 The lag in payment for wages is 1/4 month and 1/2 month for overheads. The cash and bank balance on 1st October is expected to be RO 1,500. Other information is given as follows: Admin. Selling, etc 160 160 175 175 200 200 225 Production 225 225 250 300 300 350 350 Preference share dividends @ 5% on RO 50,000 are to be paid on 1st December. Calls on 250 equity shares @RO 2 per share are expected on 1st November. Dividends from investments amounting to RO 250 are expected on 31st December. Income tax (advance) is to be paid in December RO 1,500 Plant and machinery are to be installed…
In May 2022, the budget committee of Concord Stores assembles the following data in preparation of budgeted merchandise purchases for the month of June. 1. 2. 3. 4. (a) Expected sales: June $430,000, July $516,000. Cost of goods sold is expected to be 75% of sales. Desired ending merchandise inventory is 30% of the following (next) month's cost of goods sold. The beginning inventory at June 1 will be the desired amount. Your answer is correct. Compute the budgeted merchandise purchases for June. (b) Budgeted Cost of Goods Sold Add V Total Less V CONCORD STORES Merchandise Purchases Budget For the Month Ending June 30, 2022 Desired Ending Merchandise Inventory Beginning Merchandise Inventory Required Merchandise Purchases eTextbook and Media V CONCORD STORES Budgeted Income Statement (Partial) $ Prepare the budgeted multiple-step income statement for June through gross profit. $ $ 322500 116100 438600 (96750) 341850 Attempts: 2 of 3 used
In May 2022, the budget committee of Concord Stores assembles the following data in preparation of budgeted merchandise purchases for the month of June. 1. 2. 3. 4. (a) Expected sales: June $430,000, July $516,000. Cost of goods sold is expected to be 75% of sales. Desired ending merchandise inventory is 30% of the following (next) month's cost of goods sold. The beginning inventory at June 1 will be the desired amount. Compute the budgeted merchandise purchases for June. CONCORD STORES Merchandise Purchases Budget $ $
In May 2022, the budget committee of Crane Stores assembles the following data in preparation of budgeted merchandise purchases for the month of June. 1. 2. 3. 4. (a) Expected sales: June $400,000, July $480,000. Cost of goods sold is expected to be 75% of sales. Desired ending merchandise inventory is 30% of the following (next) month's cost of goods sold. The beginning inventory at June 1 will be the desired amount. Compute the budgeted merchandise purchases for June. CRANE STORES Merchandise Purchases Budget $ $
Whispering Winds Landscaping Company is preparing its budget for the first quarter of 2022. The next step in the budgeting process is to prepare cash receipts and cash payments schedules. To that end the following information has been collected.Clients usually pay 60% of their fee in the month that service is provided, 30% the month after, and 10% the second month after receiving service.Actual service revenue for 2021 and expected service revenues for 2022 are: November 2021, $130,000; December 2021, $100,000; January 2022, $144,000; February 2022, $161,000; March 2022, $170,000.Purchases of landscaping supplies are paid 30% in the month of purchase and 70% the following month. Actual purchases for 2021 and expected purchases for 2022 are: December 2021, $21,000; January 2022, $19,600; February 2022, $22,400; March 2022, $27,500. Determine the account receivable balances at March 31, 2022.
An entity is budgeting its cash payments for the last quarter of 2020. All purchases are made on account with 2% discount for early payments. The October purchases is set at P150,000, and purchases increase by 20% based on the previous month. 50% of purchases are paid on the month of purchase, availing of the purchase discount; 45% are paid the next month; and 5% are paid after 2 months from date of purchase. How much is the total cash payment to be made in December 2020?
REQUIRED Use the information given below to prepare the Cash Budget for each of the first three months of operations (i.e. January, February, March 2024). Use separate monetary columns for each month. INFORMATION The following information relates to Baby Manufacturers which will commence business on 01 January 2024 with R750 000 cash: 1. New machinery and equipment will be purchased on 02 January 2024 for R300 000. A deposit of 20% will be paid immediately. The balance of the debt as well as finance charges of R18 000 will be paid in 12 equal instalments commencing February 2024. 2. Production will commence on 05 January 2024 and 30% of the sales for February's will be manufactured in January. Each month thereafter the production will consist of 70% of the current month's sales and 30% of the following month's sales. 3. Estimated sales at R72 per unit are as follows: January February March April Units 0 8 500 11 000 10 500 4. Cash sales are expected to comprise 60% of the total sales.…
Adeline Sdn Bhd has engaged you to prepare its cash budget for July 2021. The following is the information extracted from its management report: May 2021 June 2021 July 2021 Credit sales 500,000 450,000 600,000 Purchases of direct material 300,000 500,000 550,000 Expenses 80,000 Other receipts: Sale of investments 30,000 Other payments: Purchase of van 60,000 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Of direct material purchases, 40% are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items and expenses above are paid in the month incurred. The cash balance on 1 July 2021 is expected to be RM60,000. Adeline wants to maintain a minimum cash balance of RM50,000. Required: How much will Adeline receive in…
the task of preparing the cash budget for the business for the quarter ending September 30, 2022. Your data collection has yielded the following:i) Extracts from the sales and purchases budgets are as follows:Month CashSales SalesOn Account CashPurchases PurchasesOn AccountMay $75,000 $480,000 $390,000June $135,000 $600,000 $36,000 $360,000July $86,800 $720,000 $61,700 $450,000August $105,600 $640,000 $68,800 $400,000September $112,500 $800,000 $77,250 $500,000ii) An analysis of the records shows that trade receivables (accounts receivable)…