Sales on account are collected over a three-month period as follows: 10% collect
ID: 2372725 • Letter: S
Question
Sales on account are collected over a three-month period as follows: 10% collected in the month of sale, 60% collected in the month following sale, and 28% collected in the second month following sale. The remaining 2% is uncollectible.
Purchases of inventory will total $30,000 for September. Thirty percent of a month's inventory purchases are paid for during the month of purchase. The accounts payable remaining from August's inventory purchases total $19,000, all of which will be paid in September.
Prepare a schedule of expected cash disbursements for inventory purchases for September. (Do not round intermediate calculations. Omit the "$" sign in your response.)
Prepare a cash budget for September. Indicate in the financing section any borrowing that will be needed during September. Assume that any interest will not be paid until the following month. (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Calgon Products, a distributor of organic beverages, needs a cash budget for September. The following information is available:Explanation / Answer
1) September Cash sales = 8300
From account sale
July sale = 0.28* 19000= 5320
august sale = 0.60*34000 = 20400
september sale = 0.1*37000 = 3700
total cash collection = 37720
2) Payment to suppliers
august purchase = 19000
september purchase = 0.3*30000 = 9000
Total payment = 28000
3)Cas budget
Beginning cash = 10900
collection from customers = 37720
total cash available before current financing = 48620
Less disbursements:
payment to supplier for inventory = 28000
Selling and administrative expenses = 14000
Equipment purchases = 19000
Total disbursement = 61000
Excess (deficiency) of cash available over disbursements = (12380)
Borrowing = 12380+6900 = 19280
Cash balance, ending = 6900
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