13-121
May
240,000
June
270,000
July
300,000
August
280,000
Atlanta Import’s goal is to maintain an inventory equal to 10% of next month’s sales
requirements. March 31st inventory is projected to be 18,000 units.
Required:
Prepare a purchases budget (in units) for Atlanta Import for as many months as is
possible. Assume a 30-day month.
Sales
Inv
Produce
Shipping Company plans to sell 90,000 units of a certain product line at a price of $16.
There are 7,500 units of the product in the inventory at January 1 and the inventory is to be
increased 15% during the year.
Two types of materials are used to make the product. Three units of Material A, each
costing 40 cents, are required for each unit of product, and two units of Material B, each
costing 36 cents, are required for each unit of product. On January 1, there are 10,000
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13-124
Folkes, Inc has prepared a sales budget for the second quarter as shown below:
Budgeted Sales
April
$400,000
May
500,000
June
600,000
The company is in the process of preparing a cash budget for the second quarter. To this
end, the following information has been assembled:
Collections on
Sales
In month of sale
70%
In month following sale
25%
In second month following
sale
5%
The company gives a 1% cash discount to customers paying in the month of their sale.
Records show past sales to be: January $300,000, February $340,000, and March
$360,000.
Required:
Prepare a cash receipts budget for the third quarter.
Collected in month
13-126
Parlour Company has the following sales budget for the coming year.
Month
Sales
January
$180,000
February
$190,000
March
$210,000
April
$230,000
Purchase
13-128
Xenos Company has the following sales projections for the coming months:
Month
Sales
January
$60,000
February
68,000
March
75,000
April
80,000
May
95,000
June
90,000
Xenos collects 20% of its sales in the month of sale, 45% in the month following the sale,
and 35% in the second month following the sale.
Required:
a. Prepare a schedule of cash receipts for the three months April through June.
b. What would be the accounts receivable balance on June 30?
13-130
Italian Company has the following sales budget for the coming year.
Month
Sales
January
$300,000
February
$315,000
March
$345,000
April
$367,500
February
Sales
February
Roman Company has the following sales budget for the coming year.
Month
Sales
July
$270,000
August
$288,000
September
$312,000
October
$330,000
Purchase
Things Inc. is preparing its cash budget for April. The budgeted beginning cash balance is
$19,000. Budgeted cash receipts total $105,000 and budgeted cash disbursements total
$98,000. The desired ending cash balance is $50,000. The company can borrow up to
$120,000 at any time from a local bank, with interest not due until the following month.
Required:
Prepare the company’s cash budget for April in good form. Make sure to indicate what
borrowing, if any, would be needed to attain the desired ending cash balance.
13-136
The Boxer Company, a merchandising firm, has budgeted its activity for December
according to the following information:
• Sales at $500,000, all for cash.
• Merchandise Inventory on November 30 was $250,000.
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Marketing and administrative expenses
Increase in ending merchandise inventory
Total cash collections in December
James, Inc. makes a product that has peak sales in September of each year. The company
has prepared a sales budget for the third quarter as shown below:
Budgeted Sales
July
$200,000
August
400,000
September
600,000
The company is in the process of preparing a cash budget for the third quarter and must
determine the expected cash collections by month. To this end, the following information
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has been assembled:
Collections on Sales
In month of sale
60%
In month following sale
25%
In second month
following sale
15%
The company gives a 3% cash discount to customers paying in the month of their sale.
The company charges 2% interest to customers who pay in the second month following
their sales. The accounts receivable balance to start the quarter is $150,000: $35,000 from
May’s sales and $115,000 from June’s sales.
Required:
Prepare a cash receipts budget for the third quarter.
Collected in
month of sale
$200,000 ×
$400,000 ×
13-140
Davis Company has forecast its sales as follows:
August
$180,000
(actual)
September
$280,000
(actual)
October
$360,000
November
$400,000
December
$450,000