chapter%2094-1 - Accounting 2102 Farmer Chapter 9 Practice...

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Accounting 2102 Farmer Chapter 9 Practice We Sit Around All Day and Make Faces, Inc., a manufacturer of clocks, developed the following budgeted data: Budgeted Sales . . . 70% of sales on account are collected in the month of sale, 15% of sales on account are collected in the first month following the sale, 10% of sales on account are collected in the second month following the sale Total Budgeted Sales in June ($40,000 of total sales are sales on account) $80,000 Total Budgeted Sales in July ($40,000 of total sales are sales on account) $95,000 Total Budgeted Sales in August ($30,000 of total sales are sales on account) $110,000 Budgeted Raw Material Purchases . . . 25% of purchases on account are paid in the month of purchase, 75% of purchases on account are paid in the month following the month of purchase Budgeted Purchases on Account for June $60,000 Budgeted Purchases on Account for July $50,000 Budgeted Purchases on Account for August $40,000 All other budgeted cash expenses are paid when incurred. Budgeted August salaries are $31,400, Budgeted August utilities are $3,220, and Budgeted August depreciation is $10,000. The cash balance on August 1 st is expected to be $12,300. a. Calculate anticipated August cash receipts from sales on account . b. Calculate anticipated August cash payments for raw material purchases . c. Calculate the budgeted cash balance on August 31 st . d. What percentage of August sales on account are budgeted to be uncollectible? Page 1 of 9
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Accounting 2102 Farmer Chapter 9 Practice Solution for We Sit Around All Day and Make Faces a. sales on acct collection percentage budgeted collections in august august $ 30,000 70% $ 21,000 july $ 40,000 15% $ 6,000 june $ 40,000 10% $ 4,000 $ 31,000 b. purchases on acct payment percentage budgeted cash disbursements in august august $ 40,000 25% $ 10,000 july $ 50,000 75% $ 37,500 $ 47,500 c. august 1 cash balance $ 12,300 budgeted collections in august $ 31,000 august cash sales $ 80,000 budgeted cash disbursements in august $ (47,500) salaries $ (31,400) utilities $ (3,220) august 31 cash balance $ 41,180 d. =(100%-70%-15%-10%)=5% Page 2 of 9
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Accounting 2102 Farmer Chapter 9 Practice The following information is from White Mountain Furniture Company’s financial records: Month Sales Purchases July $180,00 0 $105,000
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This note was uploaded on 09/07/2011 for the course ACCT 2102 taught by Professor Farmer during the Spring '08 term at University of Georgia Athens.

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chapter%2094-1 - Accounting 2102 Farmer Chapter 9 Practice...

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