Lightning-Bug Products Company is preparing a cash receipts schedule for the fou
ID: 2499593 • Letter: L
Question
Lightning-Bug Products Company is preparing a cash receipts schedule for the fourth quarter of 200X. Total sales for August and September of 200X are $130,000 and $110,000, respectively.
Budgeted sales for the fourth quarter of 200X follow:
Oct. Nov. Dec.
Budgeted total sales $106,000 $125,000 $149,000
25% of sales are for cash; the remaining 75% are on account. Ten percent of the sales on account are collected in the month of sale, 70% in the month following the sale, and the remaining 20% in the second month following the sale. Lightning-Bug Products does not anticipate any uncollectible accounts.
Determine the cash collected in November:
$111,690
$112,775
$111,960
$116,360
Lightning-Bug Products Company is preparing a cash receipts schedule for the fourth quarter of 200X. Total sales for August and September of 200X are $130,000 and $110,000, respectively.
Budgeted sales for the fourth quarter of 200X follow:
Oct. Nov. Dec.
Budgeted total sales $106,000 $125,000 $149,000
25% of sales are for cash; the remaining 75% are on account. Ten percent of the sales on account are collected in the month of sale, 70% in the month following the sale, and the remaining 20% in the second month following the sale. Lightning-Bug Products does not anticipate any uncollectible accounts.
Determine the cash collected in December:
$126,480
$127,240
$128,680
$129,950
Rochester Shoe and Boot Shop plans to produce the following quantity of waterproof boots during the first four months of 200X:
Units
January 1,300
February 2,300
March 500
April 200
Each unit requires 6 feet of materials. At the beginning of January, they had 1,950 feet of materials on hand, and plans to maintain an ending inventory of materials equal to 25% of next months production needs. Each foot of materials is expected to cost $5.
Determine the direct materials to be purchased in January:
8,250 feet
11,100 feet
9,300 feet
$111,690
$112,775
$111,960
$116,360
Explanation / Answer
Calculation of cash collected in November:
Cash Sales = (125000*25%)
$ 31,250
Add: Collection from Credit Sales:
10% of November credit Sales = (125000*75%*10%)
$ 9,375
70% of October credit Sales = (106000*75%*70%)
$ 55,650
20% of September credit Sales = (110000*75%*20%)
$ 16,500
Cash collected in November
$ 112,775
Calculation of cash collected in November:
Cash Sales = (125000*25%)
$ 31,250
Add: Collection from Credit Sales:
10% of November credit Sales = (125000*75%*10%)
$ 9,375
70% of October credit Sales = (106000*75%*70%)
$ 55,650
20% of September credit Sales = (110000*75%*20%)
$ 16,500
Cash collected in November
$ 112,775
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