The cash budget is a schedule of expected cash

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Financial and Managerial Accounting Using Excel for Success
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Chapter 21 / Exercise 1
Financial and Managerial Accounting Using Excel for Success
Reeve/Warren
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21) The cash budget is a schedule of expected cash receipts ,disbursements, and financing.Answer: TRUEDiff: 1Objective: AAACSB: Analytical thinking22) A key type of sensitivity analysis for managers is to play "what-if" with the cash budgetso as to anticipate outcomes and take steps to minimize the effects of shortfalls in cash balances.Answer: TRUEDiff: 1Objective: AAACSB: Analytical thinking23) Russell Company has the following projected account balances for June 30, 2018: Accounts payable$80,000Sales$1,600,000Accounts receivable200,000Capital stock800,000Depreciation, factory48,000Retained earnings?Inventories (5/31 & 6/30)360,000Cash112,000Direct materials used 400,000Equipment, net480,000Office salaries160,000Buildings, net800,000Insurance, factory8,000Utilities, factory32,000Plant wages280,000Selling expenses120,000Bonds payable320,000Maintenance, factory56,000Required:a.Prepare a budgeted income statement for June 2018b.Prepare a budgeted balance sheet as of June 30, 2018. Answer: a.Russell CompanyBudgeted Income StatementFor the Month of June 2018 Sales$1,600,000Cost of goods sold:Materials used$400,000Wages280,000Depreciation48,000Insurance8,000Maintenance56,000Utilities32,000824,000Gross profit776,000Operating expenses:Selling expenses$120,000Office salaries160,000280,000Net income$496,000
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Financial and Managerial Accounting Using Excel for Success
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Chapter 21 / Exercise 1
Financial and Managerial Accounting Using Excel for Success
Reeve/Warren
Expert Verified
b.Russell CompanyBudgeted Balance SheetJune 30, 2018Assets:Liabilities and Owners' Equity:Cash$ 112,000Accounts payable$ 80,000Accounts receivable200,000Bonds payable320,000Inventories360,000Capital stock800,000Equipment, net480,000Retained earnings*752,000Buildings, net800,000Total$1,952,000Total$1,952,000*$1,952,000 - ($80,000 + $320,000 + $800,000) = $752,000 Diff: 2Objective: AAACSB: Application of knowledge24) Duffy Corporation has prepared the following sales budget: MonthCash SalesCredit SalesMay$16,000$68,000June20,00080,000July18,00074,000August24,00092,000September22,00076,000 Collections are 40% in the month of sale, 45% in the month following the sale, and 10% twomonths following the sale. The remaining 5% is expected to be uncollectible. Required: Prepare a schedule of cash collections for July through September. Answer: JulyAugustSeptemberTotalCash sales$18,000$24,000$22,000$64,000Collections of credit sales from:Current month29,60036,80030,40096,800Previous month36,00033,30041,400110,700Two months ago6,8008,0007,40022,200Total collections$90,400$102,100$101,200$293,700Diff: 2Objective: AAACSB: Application of knowledge
25) The following information pertains to Amigo Corporation: MonthSalesPurchasesJuly$30,000$10,000August34,00012,000September38,00014,000October42,00016,000November48,00018,000December60,00020,000Cash is collected from customers in the following manner:Month of sale (2% cash discount)30%Month following sale50%Two months following sale15%Amount uncollectible5%40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. Required: a.Prepare a summary of cash collections for the 4th quarter.b.Prepare a summary of cash disbursements for the 4th quarter. Answer: a.Cash collections Oct $36,448 + Nov $40,812 + Dec $47,940 = $125,200 OctoberNovemberDecemberAugust$ 5,100September19,0005,700October12,34821,0006,300November14,11224,000December17,640-------------------------$36,448$40,812$47,940b.Cash disbursements Oct $14,800 + Nov $16,800 + Dec $18,800 = $50,400 OctoberNovemberDecemberSeptember8,400October6,4009,600November7,20010,800December8,000-------------------------$14,800$16,800$18,800Diff: 2Objective: AAACSB: Application of knowledge

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