Question

Elsa and Anna operate a business that manufactures frozen foods. They are preparing a cash budget...

Elsa and Anna operate a business that manufactures frozen foods. They are preparing a cash budget for the second quarter of 2020. Because of COVID-19 they expect 90% of March sales will be collected in June and customers have been informed that they do not need to pay until then. The other 10% of March sales will be collected in March. After March, they anticipate that collections will return to normal, where 40% of sales are collected in the month of sale, 50% is collected in the month after sale, and 10% is collected two months after sale.


1) Calculate the total cash receipts for June, using the following information.

             Sales:

            March              $90,000

            April                $80,000

            May                 $70,000

            June                 $65,000

2)   Calculate the accounts receivable balance at June 30.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1)

Computation of Total cash to be collected in the month of June:

March sale = $90000 * 90% = $81000

April Month sale = $80000 * 10% = $8000

May Month sale = $70000 * 50% = $35000

June Month sale = $65000 * 40% = $26000

Total cash collected in month of June = $81000 + $8000 + $35000 + $26000 = $150000.

2)

Computation of Account Receivable Balance at June 30:

May month sale = $70000 * 10% = $7000

June month sale = $65000 * 60% = $39000

Account Receivable at June 30 = $7000 + $39000 = $46000.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Circle A Company (XXX) is preparing its cash collections budget for the 2nd quarter of 2012.  ...
Circle A Company (XXX) is preparing its cash collections budget for the 2nd quarter of 2012.   Budgeted sales are as follows: Budgeted sales Apr May Jun Cash sales $10,000 $9,000 $7,500 Credit sales 24,000 20,000 16,500 Total sales $34,000 $29,000 $24,000 Accounts receivable at March 31 were $14,000. The budget assumes that 20% of credit sales are collected in the month of sale, and the remaining 80% are collected one month later. Please prepare the cash collections budget. For the...
Procter & Gamble is preparing its cash budget. It expects to have sales of $40,000 in...
Procter & Gamble is preparing its cash budget. It expects to have sales of $40,000 in January, $30,000 in February, and $25,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expected cash receipts for March?
Green Landscaping Inc. is preparing its budget for the first quarter of 2020. The next step...
Green Landscaping Inc. is preparing its budget for the first quarter of 2020. The next step in the budgeting process is to prepare a cash receipts schedule and a cash payments schedule. To that end the following information has been collected. Prepare schedules for cash receipts and cash payments, and determine ending balances for balance sheet. Clients usually pay 60% of their fee in the month that service is performed, 30% the month after, and 10% the second month after...
Shown below are the budgeted sales for ABC Company for the next six months: Sales for...
Shown below are the budgeted sales for ABC Company for the next six months: Sales for Cash Sales on Account January $15,000 $ 70,000 February $18,000 $ 80,000 March $14,000 $160,000 April $26,000 $120,000 May $18,000 $170,000 June $24,000 $105,000 On average, 35% of the sales on account are collected in the month of sale, 40% are collected in the month following sale, 10% are collected in the second month following sale, and the remaining 15% is collected three months...
The LaGrange Corporation had the following budgeted sales for the first half of the current year:...
The LaGrange Corporation had the following budgeted sales for the first half of the current year: Cash Sales Credit Sales January $ 60,000 $ 160,000 February $ 65,000 $ 180,000 March $ 33,000 $ 140,000 April $ 28,000 $ 113,000 May $ 38,000 $ 210,000 June $ 90,000 $ 70,000 The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Collections...
Royal Cigar Company is preparing a budget for cash collections. Its sales for November and December...
Royal Cigar Company is preparing a budget for cash collections. Its sales for November and December are estimated as $120,000 and $136,000, respectively. Past practice indicates that sales in any given month are collected as follows: month of sale, 60%; month following the month of sale, 35%; uncollectible accounts, 5%. The company allows a 2% discount for cash collections in the month of sale. What is the net cash estimated to be collected in December? Net cash estimated collections:_________
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended...
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following information is available Deacon Company Balance Sheet March 31 Assets Cash $ 55,000 Accounts receivable 36,000 Inventory 40,000 Buildings and equipment, net of depreciation 100,000 Total assets $ 231,000 Liabilities and Stockholders’ Equity Accounts payable $ 51,300 Common stock 70,000 Retained earnings 109,700 Total liabilities and stockholders’ equity $ 231,000 Budgeted Income Statements April May June Sales $ 100,000 $...
Royal Cigar Company is preparing a budget for cash collections. Its sales for November and December...
Royal Cigar Company is preparing a budget for cash collections. Its sales for November and December are estimated as $130,000 and $148,000, respectively. Past practice indicates that sales in any given month are collected as follows: month of sale, 65%; month following the month of sale, 30%; uncollectible accounts, 5%. The company allows a 2% discount for cash collections in the month of sale. What is the net cash estimated to be collected in December?
(N ONE)    Beech Corporation is a merchandising company that is preparing a master budget for...
(N ONE)    Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:                              Beech Corporation                           Balance Sheet June 30 Assets Cash . . . . . . . . . . . . . . . . . . . . . . . . . .                               . . . $ 90,000 Accounts receivable . . ....
Exercise 20-25A Merchandising: Preparing a cash budget LO P4 Use the following information to prepare the...
Exercise 20-25A Merchandising: Preparing a cash budget LO P4 Use the following information to prepare the July cash budget for Acco Co. It should show expected cash receipts and cash payments for the month and the cash balance expected on July 31. Beginning cash balance on July 1: $72,000. Cash receipts from sales: 30% is collected in the month of sale, 50% in the next month, and 20% in the second month after sale (uncollectible accounts are negligible and can...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT