Randall Company is a merchandising company that sells a single product. The comp

Question

Randall Company is a merchandising company that sells a single product. The company's inventories, production, and sales in units for the next three months have been forecasted as follows:

Units are sold for $10 each. One fourth of all sales are paid for in the month of sale and the balance are paid for in the following month. Accounts receivable at September 30 totaled $451,000.

Merchandise is purchased for $4 per unit. Half of the purchases are paid for in the month of the purchase and the remainder are paid for in the month following purchase. Selling and administrative expenses are expected to total $121,000 each month. One half of these expenses will be paid in the month in which they are incurred and the balance will be paid in the following month. There is no depreciation. Accounts payable at September 30 totaled $291,000 includes selling and administrative payables.

Cash at September 30 totaled $81,000. A payment of $301,000 for purchase of equipment is scheduled for November, and a dividend of $201,000 is to be paid in December.

Prepare a schedule of expected cash collections for each of the months of October, November, and December. (Omit the "$" sign in your response.)

Prepare a schedule showing expected cash disbursements for merchandise purchases and selling and administrative expenses for each of the months October, November, and December. (Omit the "$" sign in your response.)

Prepare a cash budget for each of the months October, November, and December. There is no minimum required ending cash balance.  (Input all amounts as positive values. Omit the "$" sign in your response.)

Randall Company is a merchandising company that sells a single product. The company's inventories, production, and sales in units for the next three months have been forecasted as follows:

Explanation / Answer

a. Schedule of Expected Cash Collections October November December    Sales           610,000           710,000           410,000    September accounts receivable           451,000    October sales           152,500           457,500    November sales           177,500           532,500    December sales           102,500    Total cash collections           603,500           635,000           635,000 b. Schedule of Expected Cash Disbursements October November December    Merchandise purchases           244,000           284,000           144,000    Selling and administrative expenses           121,000           121,000           121,000    Total incurred           365,000           405,000           265,000    Disbursements, previous month           291,000           182,500           202,500    Disbursements, current month           182,500           202,500           132,500    Total           473,500           385,000           335,000 c. Randall Company Cash Budget October November December    Beginning cash balance             81,000           211,000           160,000    Add cash receipts           603,500           635,000           635,000    Total cash available           684,500           846,000           795,000    Disbursements         Accounts payable           473,500           385,000           335,000         Payment for equipment           301,000         Payment for dividend           201,000    Total disbursements           473,500           686,000           536,000

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