The following is the sales budget for Lemonis, Incorporated, for the first quarter of 2021: January February Sales budget $ 202,000 $ 222,000 March $ 245,000 Credit sales are collected as follows: 60 percent in the month of the sale. 30 percent in the month after the sale. 10 percent in the second month after the sale. The accounts receivable balance at the end of the previous quarter was $86,000 $56,000 of which was uncollected December sales). a. Calculate the sales for November. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Calculate the sales for December. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Calculate the cash collections from sales for each month from January through March. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. November sales b. December sales c. January cash collections c. February cash collections c. March cash collections
The following is the sales budget for Lemonis, Incorporated, for the first quarter of 2021: January February Sales budget $ 202,000 $ 222,000 March $ 245,000 Credit sales are collected as follows: 60 percent in the month of the sale. 30 percent in the month after the sale. 10 percent in the second month after the sale. The accounts receivable balance at the end of the previous quarter was $86,000 $56,000 of which was uncollected December sales). a. Calculate the sales for November. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Calculate the sales for December. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Calculate the cash collections from sales for each month from January through March. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. November sales b. December sales c. January cash collections c. February cash collections c. March cash collections
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
Section: Chapter Questions
Problem 5PB: Cash budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for...
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
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The following is the sales budget for Lemonis, Incorporated, for the first quarter of 2021:
January February
Sales budget $ 202,000 $ 222,000
March
$
245,000
Credit sales are collected as follows:
60 percent in the month of the sale.
30 percent in the month after the sale.
10 percent in the second month after the sale.
The accounts receivable balance at the end of the previous quarter was $86,000
($56,000 of which was uncollected December sales).
a. Calculate the sales for November. (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
b. Calculate the sales for December. (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
c. Calculate the cash collections from sales for each month from January through
March. (Do not round intermediate calculations and round your answers to 2
decimal places, e.g., 32.16.)
a. November sales
b. December sales
c. January cash collections
c. February cash collections
c. March cash collections
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Here are some important figures from the budget of Nashville Nougats, Incorporated, for
the second quarter of 2021:
Credit sales
Credit purchases
Cash disbursements
Wages, taxes, and
expenses
Interest
Equipment purchases
Beginning cash balance
Cash receipts
Cash collections from credit sales
Total cash available
Cash disbursements
The company predicts that 5 percent of its credit sales will never be collected, 40
percent of its sales will be collected in the month of the sale, and the remaining 55
percent will be collected in the following month. Credit purchases will be paid in the
month following the purchase.
Purchases
Wages, taxes, and expenses
Interest
April
May
June
$324,000 $304,000 $364,000
132,000
155,000 180,000
In March 2021, credit sales were $194,000 and credit purchases were $134,000. Using
this information, complete the following cash budget: (Do not round intermediate
calculations. Leave no cells blank - be certain to enter "0" wherever required.)
Equipment purchases
Total cash disbursements
44,400
11,400
84,000
Ending cash balance
11,900
11,400
158,000
63,400
11,400
O
April
127,000
May
June
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