Armidale Corporation has provided the following cash budget forecasts: Month Sales Purchases July $30,000 $10,000 August...
Armidale Corporation has provided the following cash budget forecasts:
Month Sales Purchases
July $30,000 $10,000
August 34,000 $12,000
September 38,000 $14,000
October 42,000 $16,000
November 48,000 $18,000
December 60,000 $20,000
-
Cash is collected from customers in the following manner: Month of sale (2% cash discount)30% , Month following sale 50% ,Two months following sale 15% ,Amount uncollectible 5%. 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
- Required:
-
Prepare a summary of cash collections for the 4th quarter. (Marks 3)
-
Prepare a summary of cash disbursements for the 4th quarter. (Marks 3)
-
Homework Answers
1) Solution: $125,200
Working:
|
October |
November |
December |
|
|
August |
5,100 |
||
|
September |
19,000 |
5,700 |
|
|
October |
12,348 |
21,000 |
6,300 |
|
November |
14,112 |
24,000 |
|
|
December |
17,640 |
||
|
36,448 |
40,812 |
47,940 |
Collections of cash: $36,448 + $40,812 + $47,940 = $125,200
2) Solution: $50,400
Working:
|
October |
November |
December |
|
|
September |
8,400 |
||
|
October |
6,400 |
9,600 |
|
|
November |
7,200 |
10,800 |
|
|
December |
8,000 |
||
|
14,800 |
16,800 |
18,800 |
Disbursements of cash: $14,800 + $16,800 + $18,800 = $50,400
Add Answer to:
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