User Account

All Pages

budgeted, Cost Accounting

Assignment Help:
Question:

Yamba Home Products is just beginning its fourth quarter, in which peak sales occur. The company has requested a $12,000, 90-day loan from its bank to help meet cash requirements during the quarter. The loan officer has asked for a cash budget for the quarter to help determine whether the loan should be made.

The following data are available for the quarter:

1. On April 1, the start of the quarter, the company had a cash balance of $6,000. Accounts receivable on April 1 totalled $31,500, of which $29,500 will be collected during April and $1,600 will be collected during May. The remainder will be uncollectable.

2. Past experience shows that 25 percent of a month''s sales are collected in the month of sale, 70 percent in the month following sale, and 4 percent in the second month following sale. Budgeted sales and expenses for the fourth quarter follow:







April


May


June




Sales


$ 50,000


$60,000


$45,000




Merchandise purchase


36,000


27,000


24,000




Payroll


6,500


6,750


6,000




Rent payment


4,500


4,500


4,500




Other Cash payments


8,500


9,100


7,500




Depreciation


2,500


2,500


2,500


3. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases on March 31, which will be paid during April, totalled $30,000.

4. In preparing a cash budget, assume that the loan is made in April and repaid in June. Interest on the loan will total $450.

Required:

a. Prepare a schedule of budgeted cash collections for April, May and June and for the quarter in total.

b. Prepare a cash budget, by month and in total, for the quarter.

c. If the company needs a minimum cash balance of $5,000 to start each month, can the loan be repaid as planned? Explain.

Related Discussions:- budgeted

Calculate the optimal re-order quantity, Mr. Marley is a wholesaler who buy...

Mr. Marley is a wholesaler who buys and sells a wide range of products, one of which is the Laker. Mr. Marley sells 24,000 units of the Laker each year at a unit price $20. Sales o

Analysis of fund flow and cash flow statements, After you have studied this...

After you have studied this section, you should be capable to: know the idea of funds flowing by a business in a dynamic situation understand the role of working capital

306, creating a decision treeplan

creating a decision treeplan.

Methods required to allocate joint costs, Methods Required To Allocate Join...

Methods Required To Allocate Joint Costs 1) Physical/Unit Measure 2) Constant gross margin rate 3) Net realizable value.

Differential costing, What do you mean by differential costing ? How it dif...

What do you mean by differential costing ? How it differ from marginal costing ? explain its practical application with examples?

Overhead absorption, Overhead Absorption Absorption of overheads refer...

Overhead Absorption Absorption of overheads refers to the sharing out of overhead costs to the some cost centers such used the overheads. This is utilized when the overheads c

What is the free cash flow for master designs, Master Designs Company has c...

Master Designs Company has cash flows for operating activities of $350,000. Cash flows used for investments in property, plant, and equipment totaled $65,000, of which 70% of this

Comparison between marginal and absorption costing, Comparison between Marg...

Comparison between Marginal Costing and Absorption Costing There are accountants who favour all costing method. Arguments in favour about absorption costing are specified a

Basic, sir i

sir i

What would be the cost transferred to the blending dept., Walter manufactur...

Walter manufactures a silicone paste wax that goes through three processing departments: cracking, blending, and packing. All raw materials are introduced at the start of work in t

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd