Demonstration_Problem_for_Chapter_7 - Demonstration Problem...

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Demonstration Problem for Chapter 7 Demonstration Problem 7-1 Comprehensive Budgeting Problem Chang Distributors, a wholesale company, is considering whether to open a new distribution center. The center would open January 1, 2006. To make the decision, the planning committee requires a master budget for the center’s first quarter of operation (January, February, and March of 2006). Required You are to construct the first quarter master budget based on the following expectations: a. January sales are estimated to be $400,000 of which $100,000 will be cash and $300,000 will be credit. The company expects sales to grow 10% per month. Prepare a sales budget. January February March Cash 100,000 110,000 121,000 Credit 300,000 330,000 363,000 400,000 440,000 484,000 1,324,000 b. The company expects to collect 100% of accounts receivable in the month following the sale. Prepare a schedule of expected cash receipts. January February March Cash sales 100,000 110,000 121,000 Collection --------- 300,000 330,000 100,000 410,000 451,000 c. Use the information developed in requirements a and b to determine the amount
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Demonstration_Problem_for_Chapter_7 - Demonstration Problem...

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