The december 31 20x0 balance sheet disclosed the following

Assignment Help Accounting Basics

Reference no: EM13485971

Sophisticates, Inc., a distributor of jewelry throughout California, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the company's accounting records:

•All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 35 percent are collected in the following month. Uncollectibles amounting to 5 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20x0, will be recovered and that the recovery will be in January 20x1.

•Seventy percent of the merchandise purchases are paid for in the month of purchase; the remaining 30 percent are paid for in the month after acquisition.

•The December 31, 20x0, balance sheet disclosed the following selected figures: cash, $60,000; accounts receivable, $165,000; and accounts payable, $66,000.

•Sophisticates, Inc., maintains a $60,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 8 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time.

Reference no: EM13485971

Questions Cloud

To gain assurance that all inventory items in a clients : to gain assurance that all inventory items in a clients inventory listing schedule are valid an auditor most likely

Pimples has a salaried position with a large corporation : 1. pimples signs a contract to purchase a parcel of land. the contract recites that 44 acres are being sold. it

The company recently paid their annual dividend of 130 per : the common stock of andys sporting goods sells for 25.40 a share. the company recently paid their annual dividend of

To measure how effectively an entity employs its resources : to measure how effectively an entity employs its resources an auditor calculates inventory turnover by dividing average

The december 31 20x0 balance sheet disclosed the following : sophisticates inc. a distributor of jewelry throughout california is in the process of assembling a cash budget for the

While observing a clients annual physical inventory an : while observing a clients annual physical inventory an auditor recorded test counts for several items and noticed that

What would you pay today for a stock that is expected to : what would you pay today for a stock that is expected to make 1.50 dividend in one year if the expected dividend

The topic for your research is based on current literature : the topic for your research is based on current literature and you are to identify the basic provisions of the

Debt jones industries borrows 600000 for 10 years with an : debt jones industries borrows 600000 for 10 years with an annual payment of 100000. what is the expected interest rate

User Account

All Pages