Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 2.12MCP
To determine
Concept Introduction:
To Calculate: Cash availability for payment of dividend.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
XYZ has forecast its sales revenues and purchases for the last 5 months of 2015 to be as follows: Sales Purchases August $22,000 $17,000 September 15,000 19,500 October 25,000 29,000 November 30,000 20,000 December 26,000 24,000 60% of sales are on credit. On the basis of past experience, 50% of the accounts receivable is collected the month after the sale and the remainder are collected 2 months after the sale. Purchases are paid 30 days after they are incurred. The firm has a cash balance of $5,000 on hand as of October 31, but its minimum required cash balance is $4,000 Required: A. Prepare a schedule of cash receipts for October, November, and December. B. Prepare a cash budget for the same period.
Bulldogs Inc. sells on term 3/20, net 40. Total sale for the year are P1,200,000 on which 40% is cash sales. 30% pays on the 20th day and take discounts while the remaining customers always pay on time. What is the average amount of accounts receivable? (Use 360-day year)
Knight Roundtable Co. had annual credit sales of $1,080,000 and an average collection period of 32 days in 2018. Assume a 360-day year. What were the company’s average accounts receivable balance? Accounts receivable are equal to the average daily credit sales times the average collection period.
Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 49,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.60 per unit.
Chapter 2 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 2 - Read each definition below and write the number of...Ch. 2 - Prob. 2.1ECh. 2 - The Operating Cycle Two Wheeler Cycle Shop buys...Ch. 2 - Classification of Financial Statement Items Regal...Ch. 2 - Current Ratio Baldwin Corp. reported the following...Ch. 2 - Classification of Assets and Liabilities Indicate...Ch. 2 - Selling Expenses and General and Administrative...Ch. 2 - Prob. 2.7ECh. 2 - Income Statement Ratio The income statement of...Ch. 2 - Statement of Retained Earnings Landon Corporation...
Ch. 2 - Components of the Statement of Cash Flows Identify...Ch. 2 - Prob. 2.11ECh. 2 - Prob. 2.12MCECh. 2 - Prob. 2.13MCECh. 2 - Prob. 2.14MCECh. 2 - Materiality Joseph Knapp, a newly hired accountant...Ch. 2 - Costs and Expenses The following costs are...Ch. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Working Capital and Current Ratio The balance...Ch. 2 - Single-Step Income Statement The following income...Ch. 2 - Multiple-Step Income Statement and Profit Margin...Ch. 2 - Statement of Cash Flows Colorado Corporation was...Ch. 2 - Basic Elements of Financial Reports Comparative...Ch. 2 - Prob. 2.10MCPCh. 2 - Prob. 2.11MCPCh. 2 - Prob. 2.12MCPCh. 2 - Prob. 2.1APCh. 2 - Prob. 2.2APCh. 2 - Prob. 2.3APCh. 2 - Prob. 2.4APCh. 2 - Working Capital and Current Ratio The balance...Ch. 2 - Single-Step Income Statement The following income...Ch. 2 - Prob. 2.7APCh. 2 - Prob. 2.8APCh. 2 - Prob. 2.9APCh. 2 - Comparability and Consistency in Income Statements...Ch. 2 - Prob. 2.12AMCPCh. 2 - Prob. 2.1DCCh. 2 - Prob. 2.2DCCh. 2 - Analysis of Cash Flow for a Small Business...Ch. 2 - Prob. 2.4DCCh. 2 - The Expenditure Approval Process Roberto is the...Ch. 2 - Prob. 2.6DC
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.Similar questions
- Block, S., Hirt, G., & Danielsen, B. (2017). Foundations of Financial Management. New York, NY: McGraw-Hill Education. 16th edition. Chapter 7, Problem #11: Route Canal Shipping Company has the following schedule for aging of accounts receivable: A. Fill in column (4) for each month. (Please see uploaded image of chart) B. If the firm had $1,500,000 in credit sales over the four-month period, compute the average collection period. Average daily sales should be based on a 120 day-period. C. If the firm likes to see it bills collected in 35 days, should it be satisfied with the average colleciton period? D. Disregarding your answer to part C and considering the aging schedule for accounts receivable, should the company be satisfied? E. What additional information does the againg schedule bring to the company that the average collection period may not show? Thank you in advance!arrow_forwardXYZ has forecast its sales revenues and purchases for the last 5 months of 2015 to be as follows: Sales Purchase August 22,000 and 17,000 September 15,000 and 19,500 October 25,000 and 29,000 November 30,000 and 20,000 December 26,000 and 24,000 60% of sales are on credit. On the basis of past experience, 50% of the accounts receivable is collected the month after the sale and the remainder are collected 2 months after the sale. Purchases are paid 30 days after they are incurred. The firm has a cash balance of $5,000 on hand as of October 31, but its minimum required cash balance is $4,000 A. Prepare a schedule of cash receipts for October, November, and December. B. Prepare a cash budget for the same period.arrow_forwardInc. sells on term 3/20, net 40. Total sale for the year are P1,200,000 on which 40% is cash sales. 30% pays on the 20th day and take discounts while the remaining customers always pay on time. What is the average amount of accounts receivable? (Use 360-day year)arrow_forward
- (Pro forma accounts receivable balance calculation) The accounts receivable for Pastors Brewing Company on March 31, 2016 was $22,500. Firm sales are roughly evenly split between credit and cash sales, with 40 percent of the credit sales collected in the month after the sale and the remainder 2 months after the sale. Historical and projected sales for the brewing company are given here: end of April? a. Under these circumstances, what should the balance in accounts receivable be at b. How much cash did Pastors' realize during April from sales and collections? a. Under these ci $(Round to f t Data table MONTH January February SALES $20,000 $25,000 MONTH March O SALES $30,000 $34,000 April (projected) (Click on the icon located on the top-right corner of the data table above in order to copy its contents into a spreadsheet.) D Xarrow_forwardBingo Inc. sells on term 3/20, net 40. Total sale for the year are P1,200,000 on which 40% is cash sales. 30% pays on the 20th day and take discounts while the remaining customers always pay on time. 1. What is the average amount of accounts receivable? (Use 360-day year)arrow_forwardBluewater, Inc. has the following estimated quarterly sales for next year. The accounts receivable period is 60 days. What is the expected accounts receivable balance to the nearest dollar at the end of the third quarter? Assume that each month has 30 days. Q1 Q2 Q3 Q4 Sales $1,850 $1,625 $1,345 $1,200 Question 4 Answer a. $ 448 b. $ 897 c. $ 1,532 d. $ 673 e. $1,485arrow_forward
- (Pro forma accounts receivable balance calculation) The accounts receivable for Pastors Brewing Company on March 31, 2016 was $24,100. Firm sales are roughly evenly split between credit and cash sales, with 40 percent of the credit sales collected in the month after the sale and the remainder 2 months after the sale. Historical and projected sales for the brewing company are given here: a. Under these circumstances, what should the balance in accounts receivable be at the end of April? b. How much cash did Pastors' realize during April from sales and collections? a. Under these circumstances, what should the balance in accounts receivable be at the end of April? (Round to the nearest dollar.) $ Data table SALES $32,000 $38,000 April (projected) (Click on the icon located on the top-right corner of the data table above in order to copy its contents into a spreadsheet.) MONTH January February SALES $22,000 $27,000 MONTH March Xarrow_forwardBluewater, Inc. has the following estimated quarterly sales for next year. The accounts receivable period is 60 days. What is the expected accounts receivable balance to the nearest dollar at the end of the third quarter? Assume that each month has 30 days. Q2 Q3 Q4 $1,300 $1,425 $2,200 Ⓒa. $800 b. $367 c. $950 d. $733 Qe. $867 Q1 Sales $1,850arrow_forwardThe Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year: Sales Q1 $ 750 Beginning receivables Sales Cash collections Ending receivables Q2 $ 810 a. Accounts receivable at the beginning of the year are $335. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following: Note: Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32. Beginning receivables Sales Cash collections Ending receivables S Beginning receivables Sales Cash collections Ending receivables S Q1 S 03 $ 890 Q1 335 750 Q1 04 $ 980 b. Accounts receivable at the beginning of the year are $335. The company has a 60-day collection period. Calculate cash collections in each of the four quarters by completing the following: Note: Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32. 335 750 Q2 335 750 Q2 810 Q2 810 Q3 810 Q3…arrow_forward
- The Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year: 01 Sales $ 330 Q2 $ 390 Beginning receivables Sales Cash collections Ending receivables a. Accounts receivable at the beginning of the year are $360. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following: Note: Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32. Beginning receivables Sales Cash collections Ending receivables Q3 $ 450 Show Transcribed Text Beginning receivables Sales Cash collections Ending receivables Q1 Q1 Q1 330 04 $ 600 330 b. Accounts receivable at the beginning of the year are $360. The company has a 60-day collection period. Calculate cash collections in each of the four quarters by completing the following: Note: Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32. 330 Q2 Q2 Q2 390 390 390…arrow_forwardRazan Company has the following information during the month of June 2020: Cash Balance, May 31 Dividends paid in June Cash paid for operating expenses in June Equipment depreciation expense in June Patent amortization expense in June Cash collections on sales in June Merchandise Purchase equipment for cash in June Sales commission (50% paid in June) Razan Company wants to keep cash at the end of each month when debt is outstanding. Borrowing and repayments are carried out in multiples of $1,000. $45,000 12,000 36,800 4,500 2.000 112,500 86,200 17,500 30,500 purchases paid in June minimum cash balance of $10,000. Assume that borrowing occurs at the beginning of the month and repayments occur at the end of the month. Monthly interest of 19% is paid in Required: Prepare a cash budget for June.arrow_forwardthe following are forecasts of sales and purchases for a company. Sales Purchases April P 80,000 P 30,000 May 90,000 40,000 June 85,000 30,000 All sales are on credit. Records show that 70% of the customers pay the month of the sale 20% pay the month after the sale, and the remaining 10% pay the second month after the sale. Purchases are all paid the following month at a 2 percent discount. cash disbursements for operating expenses in June were P5,000. 1. Prepare a schedule of cash receipts and disbursements for June.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Financial instruments products; Author: fi-compass;https://www.youtube.com/watch?v=gvxozM3TUIg;License: Standard Youtube License