Use the following information to prepare a cash budget for Knightsbridge Corporation for the month of June 2018.
In May,30-day credit sales were $175,000;80% of this amount is estimated to be collectible in June.
June sales are estimated to be $425,000;cash sales are usually 25% of total sales.Only 10% of credit sales are collected in the month in which the sale is made.
Total fixed expenses are $60,000 per month,including $26,000 depreciation.Variable expenses are 55% of sales.All expenses requiring payment are paid in cash when incurred.
A $40,000 note payable must be paid on June 30.
As of May 31,the cash balance is $94,000.
Answer:
Difficulty: 3 Hard
Topic: Preparing the Master Budget: An Illustration
Learning Objecti: 23-05 Prepare the budgets and supporting schedules included in a master budget.
Bloom's: Apply
AACSB: Analytical Thinking
-Aron Company makes computer screens,Model 1 and Model 2.Aron anticipates selling the screens as follows:
The inventory on 1/1/18 is 2500 units of Model 1 and 3000 units of Model 2.Aron wants to have on hand 45% of the anticipated sales of the following month for each model.Prepare a production budget for the first 3 quarters of 2018 for both models.

Question

Use the following information to prepare a cash budget for Knightsbridge Corporation for the month of June 2018.
In May,30-day credit sales were $175,000;80% of this amount is estimated to be collectible in June.
June sales are estimated to be $425,000;cash sales are usually 25% of total sales.Only 10% of credit sales are collected in the month in which the sale is made.
Total fixed expenses are $60,000 per month,including $26,000 depreciation.Variable expenses are 55% of sales.All expenses requiring payment are paid in cash when incurred.
A $40,000 note payable must be paid on June 30.
As of May 31,the cash balance is $94,000.
Answer:
   Difficulty: 3 Hard
Topic: Preparing the Master Budget: An Illustration
Learning Objecti: 23-05 Prepare the budgets and supporting schedules included in a master budget.
Bloom's: Apply
AACSB: Analytical Thinking
-Aron Company makes computer screens,Model 1 and Model 2.Aron anticipates selling the screens as follows:
  The inventory on 1/1/18 is 2500 units of Model 1 and 3000 units of Model 2.Aron wants to have on hand 45% of the anticipated sales of the following month for each model.Prepare a production budget for the first 3 quarters of 2018 for both models.

Quizplus · Accepted Answer

The Answer of Use the following information to prepare a cash budget for Knightsbridge Corporation for the month of June 2018.
In May,30-day credit sales were $175,000;80% of this amount is estimated to be collectible in June.
June sales are estimated to be $425,000;cash sales are usually 25% of total sales.Only 10% of credit sales are collected in the month in which the sale is made.
Total fixed expenses are $60,000 per month,including $26,000 depreciation.Variable expenses are 55% of sales.All expenses requiring payment are paid in cash when incurred.
A $40,000 note payable must be paid on June 30.
As of May 31,the cash balance is $94,000.
Answer:
   Difficulty: 3 Hard
Topic: Preparing the Master Budget: An Illustration
Learning Objecti: 23-05 Prepare the budgets and supporting schedules included in a master budget.
Bloom's: Apply
AACSB: Analytical Thinking
-Aron Company makes computer screens,Model 1 and Model 2.Aron anticipates selling the screens as follows:
  The inventory on 1/1/18 is 2500 units of Model 1 and 3000 units of Model 2.Aron wants to have on hand 45% of the anticipated sales of the following month for each model.Prepare a production budget for the first 3 quarters of 2018 for both models.

Use the Following Information to Prepare a Cash Budget for Knightsbridge