Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

تمرين 1

Barnum Distributors wants a projection of cash receipts and cash payments for the month of November. On November 28, a note will be payable in the amount of $98,500. including interest. The cash balance on November 1 is $29,600. Accounts payable to merchandise creditors at the end of October were $217,000.
The company's experience indicates that 70 percent of sales will be collected during the month of sale, 20 percent in the month following the sale, and 7 percent in the second month following the sale; 3 percent will be uncollectible. The company sells various products at an average price of $11 per unit. Selected sales figures are as follows:
Because purchases are payable within 15 days. approximately 50 percent of the purchases in a given month are paid in the following month. The average cost of units purchased is $7 per unit. Inventories at the end of each month are maintained at a level of 2.000 units plus 10 percent of the number of units that will be sold in the following month The inventory on October 1 amounted to 8.000 units.
Budgeted operating expenses for November are $220,000. Of this amount. $90,000 is considered fixed (including depreciation of $35.0001. All operating expenses, other than depreciation, are paid in. the month in which they are incurred.
The company expects to sell fully depreciated equipment in November for $8:40 cash.
Instructions
Prepare a cash budget for the month of November, supported by schedules of cash collections on accounts receivable and cash payments for purchases of merchandise.