Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 14, Problem 5E
Exercise 7-5A Determining cash receipts from accounts receivable
Carmen’s Dress Delivery operates a mail-order business that sells clothes designed for frequent travelers. It had sales of $400,000 in December. Because Carmen’s Dress Delivery is in the mail-order business, all sales are made on account. The company expects a 30 percent drop in sales for January. The balance in the Accounts Receivable account on December 31 was $60,000 and is budgeted to be $41,000 as of January 31.
Required
a. Determine the amount of cash Carmen’s Dress Delivery expects to collect from accounts receivable during January.
b. Is it reasonable to assume that sales will decline in January for this type of business? Why or why not?
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Exercise 7-3A (Algo) Preparing a schedule of cash receipts LO 7-2
The budget director of Heather's Florist has prepared the following sales budget. The company had $132,600 in accounts receivable
on July 1. Heather's Florist normally collects 100 percent of accounts receivable in the month following the month of sale.
Required
a. Complete the schedule of cash receipts by filling in the missing amounts.
b. Determine the amount of accounts receivable the company will report on its third quarter pro forma balance sheet.
Complete this question by entering your answers in the tabs below.
Required A Required B
Complete the schedule of cash receipts by filling in the missing amounts.
Sales Budget
Cash sales
Sales on account
Total budgeted sales
Schedule of Cash Receipts
Current cash sales
Plus: Collections from accounts receivable
$
July
70,000 $
97,000
$ 167,000 $
$
August
70,000 $
+
September
82,000 $
116,000
198,000
82,000
78,000
132,600
$ 210,600
$ 78,000
7. Question Content Area
Schedule of Cash Receipts
Del Spencer is the owner and founder of Del Spencer's Men's Clothing Store. Del Spencer's has its own house charge accounts and has found from past experience that 10 percent of its sales are for cash. The remaining 90 percent are on credit. An aging schedule for accounts receivable reveals the following pattern:
15 percent of credit sales are paid in the month of sale.65 percent of credit sales are paid in the first month following the sale.14 percent of credit sales are paid in the second month following the sale.6 percent of credit sales are never collected.
Credit sales that have not been paid until the second month following the sale are considered overdue and are subject to a 3 percent late charge.
Del Spencer's has developed the following sales forecast:
May
$60,000
June
55,000
July
45,000
August
58,000
September
84,000
Required:
Prepare a schedule of cash receipts for August and September. Round all amounts…
Exercise 13-40 (Algo) Estimate Cash Collections (LO 13-4)
All sales at Alaska Company are on credit. The company is preparing a cash budget for November. The following information on
accounts receivable collections is available from customer payment history:
Percent of current month's sales collected this month
Percent of prior month's sales collected this month
Percent of sales two months prior to current month collected this month
Percent of sales three months prior to current month collected this month
The remaining 4 percent is not collected and is written off as bad debts. Sales to date are as follows:
November (estimated)
October
September
August
$ 280,000
600,000
250,000
670,000
Required:
What are the estimated cash receipts from accounts receivable collections in November?
Estimated cash receipts
25%
60
8
3
K
Chapter 14 Solutions
Survey Of Accounting
Ch. 14 - Prob. 1QCh. 14 - Prob. 2QCh. 14 - 3.What are the three levels of planning? Explain...Ch. 14 - 4.What is the primary factor that distinguishes...Ch. 14 - 5.What is the advantage of using a perpetual...Ch. 14 - Prob. 6QCh. 14 - Prob. 7QCh. 14 - 8. Ken Shilov, manager of the marketing...Ch. 14 - Prob. 9QCh. 14 - 10.What is the normal starting point in developing...
Ch. 14 - 11. How does the level of inventory affect the...Ch. 14 - 12.What are the components of the cash budget?...Ch. 14 - 13.The primary reason for preparing a cash budget...Ch. 14 - 14.What information does the pro forma income...Ch. 14 - 15.How does the pro forma statement of cash flows...Ch. 14 - Exercise 7-1A Budget responsibility Teresa...Ch. 14 - Exercise 7-2A Preparing a sales budget Parliament...Ch. 14 - Prob. 3ECh. 14 - Exercise 7-4A Preparing sales budgets with...Ch. 14 - Exercise 7-5A Determining cash receipts from...Ch. 14 - Exercise 7-6A Using judgment in making a sales...Ch. 14 - Exercise 7-7A Preparing an inventory purchases...Ch. 14 - Exercise 7-8A Preparing a schedule of cash...Ch. 14 - Exercise 7-9A Determining the amount of expected...Ch. 14 - Exercise 7-10A Preparing inventory purchases...Ch. 14 - Exercise 7-11A Preparing a schedule of cash...Ch. 14 - Prob. 12ECh. 14 - Exercise 7-13A Preparing a cash budget The...Ch. 14 - Exercise 7-14A Determining amount to borrow and...Ch. 14 - Prob. 15ECh. 14 - Problem 7-16A Behavioral impact of budgeting...Ch. 14 - Prob. 17PCh. 14 - Problem 7-18A Preparing an inventory purchases...Ch. 14 - Prob. 19PCh. 14 - Problem 7-21A Preparing a cash budget Fayette...Ch. 14 - Prob. 21PCh. 14 - Problem 7-22A Preparing budgets with multiple...Ch. 14 - Problem 7-23A Preparing a master budget for retail...Ch. 14 - ATC 7-1 Business Applications Case Preparing and...Ch. 14 - ATC7-2 Group Assignment Master budget and pro...Ch. 14 - ATC 7-4 Writing Assignment Continuous budgeting...Ch. 14 - Ethical Dilemma Bad budget system or unethical...
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