Week_4.2_-_Learning_Exercises-Student

# Week_4.2_-_Learning_Exercises-Student - Cash Receipts...

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Cash Receipts Budget What is the amount of expected collections for May? February sales \$80,000 March sales \$60,000 Sales budget for the second quarter: April May June \$100,000 \$150,000 \$180,000 Collection History: Month of sale 30% Following month 50% 2 months following 20% 100% Solution: march 20% 60000 april 50% may 30%

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Purchases Budget How many units need to be purchased in August? Sales budget for the third quarter (number of units): July August September 10,000 12,000 15,000 Percent of following month's sales budget as ending inventory 20% Unit purchase price \$5.00 Beginning inventory for July is the target ending inventory for June. Solution: july august
What is the amount of cash disbursements for October? October November December Purchases \$40,000 \$70,000 \$50,000 Advertising \$2,000 \$4,000 \$2,000 Commissions \$3,000 \$2,000 \$4,000 Rent \$5,000 \$5,000 \$5,000 Utilities \$1,000 \$2,000 \$2,000 Wages \$8,000 \$10,000 \$9,000 Payment for purchases: Month of purchase

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## This note was uploaded on 11/15/2010 for the course ACCOUNTING AC505 taught by Professor Seegmiller during the Spring '10 term at DeVry Denver.

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Week_4.2_-_Learning_Exercises-Student - Cash Receipts...

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