1. Atlantic Surf manufactures surfboards. The company’s sales budget for the nex
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Question
1. Atlantic Surf manufactures surfboards. The company’s sales budget for the next three months is shown below. In addition, company policy is to maintain finished goods inventory equal (in units) to 40% of the next month’s unit sales. As of June 30, the company has 1,880 finished surfboards in inventory, which complies with the policy.
Prepare a production budget for the months of July and August.
2. The Guitar Shoppe reports the following sales forecast: August, $170,000; September, $250,000. Total sales includes 40% cash sales, 50% credit sales collected in the month following sale, and 10% credit sales written off as uncollectible. Prepare a schedule of cash receipts for September.
3. Kingston anticipates total sales for June and July of $480,000 and $458,000, respectively. Cash sales are normally 60% of total sales. Of the credit sales, 20% are collected in the same month as the sale, 70% are collected during the first month after the sale, and the remaining 10% are collected in the second month after the sale. Determine the amount of accounts receivable reported on the company’s budgeted balance sheet as of July 31.
4. Santos Co. is preparing a cash budget for February. The company has $14,000 cash at the beginning of February and anticipates $69,000 in cash receipts and $103,000 in cash disbursements during February. What amount, if any, must the company borrow during February to maintain a $4,000 cash balance? The company has no loans outstanding on February 1. (Negative cash balances, if any, should be indicated with minus sign.)
5.
Use the following information:
Beginning cash balance on March 1, $73,000.
Cash receipts from sales, $310,000.
Budgeted cash payments for direct materials,$132,000.
Budgeted cash payments for direct labor $77,000.
Other budgeted cash expenses, $44,000.
Cash repayment of bank loan, $10,000.
Prepare a cash budget for the month ended on March 31 for Gado Company. The budget should show expected cash receipts and cash disbursements for the month of March and the balance expected on March 31.
Explanation / Answer
1) Prepare a production budget for the months of July and August.
July August Sales in unit 4700 5800 Add: Desired ending inventory 2320 1520 Total needs 7020 7320 Less : Beginning inventory (1880) (2320) Production unit 5140 5000Related Questions
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