The following information for Good Times Inc. has been provided to assess the proficiency of all participants in accounting: Estimates for the period January to June 2021 |Month |Sales ($) Purchases ($) Operating expenses ($) 35,000 20,000 January February Mаrch |April May June 350,000 210,000 120,000 200,000 100,000 250,000 60,000 150,000 10,000 25,000 30,000 36,000 300,000 180,000 216,000 360,000 Relevant data for the Good Times Inc. operations: a. Payment for purchases is made as follows 80% in the month of purchase and the balance in the following the following month. Payments made in the month of purchase are entitled to a 10% discount. b. Sales are made on mostly made on account and collections have the following pattern, in accordance with the credit terms 5/30, net 90. During the month of sale 60% 1* month following the sales 30% 2nd month after the sales c. Depreciation on equipment is calculated at 10% on cost per annum. The cost of equipment is S60,000. Depreciation expense is included in the operating expenses. All operating expenses are paid in the month they are incurred. d. An fixed investment at Jannou Ltd of $60,000 will be liquidated in June, after interest of $6,000 has been collected in April. e. Salaries and Wages forecasted for the six (6) month totaled $60,000 and are spread evenly over the said period. f. The beginning cash balance is $-28,000, the bank was in overdraft by the said amount. 10% Required: 1. The sales collection schedule for the six (6) months showing the accounts receivable at the end of the six months ending June 2021. 2. The purchases payment schedule for the six (6) months showing discounts received and accounts payable at the end of the six months ending June 2021. 3. The cash budget including a total column for the three (3) months ending June 2021 (April to June 2021).

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter1: Accounting As A Tool For Managers

Section: Chapter Questions

Problem 14MC: The Certified Management Accountant (CMA) certification: signifies someone specializing in tax...

See similar textbooks

Related questions

Concept explainers

Question

100%

From the attached photo answer the following:

1. What is the sales collection schedule for the six (6) months showing the accounts receivable at the
end of the six months ending June 2021.
2.What is he purchase payment schedule for the six (6) months showing discounts received and accounts payable at the end of the six months ending June 2021.
3. What is the cash budget including a total column for the three (3) months ending June 2021 (April to
June 2021).

АСC115
Assessment III
13 May 2021
The Sir Arthur Lewis Community College has recently invited all accounting students in from
the Principles of cost and management accounting (ACC115) class to participate in a business
degree scholarship with an emphasis in accounting. The award for the highest score is a full
scholarship for a degree in Business Administration.
The following information for Good Times Inc. has been provided to assess the proficiency of all
participants in accounting:
Estimates for the period January to June 2021
|Month
Purchases ($) Operating
expenses ($)
35.000
20.000
Sales ($)
350,000
210,000
120.000
January
February
200,000
100,000
250,000
300,000
360,000
10,000
25,000
March
60,000
150,000
April
May
June
30,000
36.000
180,000
216,000
Relevant data for the Good Times Inc. operations:
a. Payment for purchases is made as follows 80% in the month of purchase and the balance in
the following the following month. Payments made in the month of purchase are entitled to a
10% discount,
b. Sales are made on mostly made on account and collections have the following pattern, in
accordance with the credit tems 5/30, net 90.
During the month of sale 60%
1* month following the sales 30%
2nd month after the sales
c. Depreciation on equipment is calculated at 10% on cost per annum. The cost of equipment is
S60,000. Depreciation expense is included in the operating expenses. All operating
expenses are paid in the month they are incurred.
d. An fixed investment at Jannou Ltd of $60,000 will be liquidated in June, after interest of
$6.000 has been collected in April.
e. Salaries and Wages forecasted for the six (6) month totaled $60,000 and are spread evenly
over the said period.
f. The beginning cash balance is $-28,000, the bank was in overdraft by the said amount.
10%
Required:
1. The sales collection schedule for the six (6) months showing the accounts receivable at the
end of the six months ending June 2021.
2. The purchases payment schedule for the six (6) months showing discounts received and
accounts payable at the end of the six months ending June 2021.
3. The cash budget including a total column for the three (3) months ending June 2021 (April to
June 2021).
1

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

Expert Solution

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.