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Cash Receipts and Purchases Schedule

The document contains 4 examples calculating cash receipts, accounts receivable balances, inventory purchases, and cost of goods sold for various companies over multiple months. The first example calculates the cash receipts for Hicks Company for January to March 20X4 based on their sales collection periods. It also calculates the accounts receivable balance on March 31, 20X4. The second example performs similar calculations for Weasel Company for January to March 20X3. The third example provides a monthly inventory purchasing schedule for Amcar Inc. from March to July. The fourth example calculates a monthly purchasing schedule in dollars for Acme Inc. from June to October based on their sales estimates, gross margin, and inventory levels.

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80 views3 pages

Cash Receipts and Purchases Schedule

The document contains 4 examples calculating cash receipts, accounts receivable balances, inventory purchases, and cost of goods sold for various companies over multiple months. The first example calculates the cash receipts for Hicks Company for January to March 20X4 based on their sales collection periods. It also calculates the accounts receivable balance on March 31, 20X4. The second example performs similar calculations for Weasel Company for January to March 20X3. The third example provides a monthly inventory purchasing schedule for Amcar Inc. from March to July. The fourth example calculates a monthly purchasing schedule in dollars for Acme Inc. from June to October based on their sales estimates, gross margin, and inventory levels.

Uploaded by

kylealvarez2020
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

Shiela Mae Ponan

BSA 23
Assignment – Budget
1. Hicks Company has the following sales projections for 20X4:

January $160,000 March 175,000May 195,000


February 168,000April 180,000June 190,000

Hicks collects 30% of its sales in the month of sale, 45% in the month following the sale, and 24% in the second
month following the sale. Records show that sales were $160,000 in November and $168,000 in December
20X3.

a. Prepare a schedule of cash receipts for the first three months of 20X4.
Solution:

January Collection:(24% x 160,000) $38,400


(45% x 168,000) $75,600
(30% x 160,000) $48,000
$162,000

February Collection:(24% x 168,000) $40,320


(45% x 160,000) $72,000
(30% x 168,000) $50,400
$162,720

March Collection:(24% x 160,000) $38,400


(45% x 168,000) $75,600
(30% x 175,000) $52,500
$166,500

b. What would be the accounts receivable balance (net of bad debts) on March 31, 20X4?
Solution:

February sales (168,000 x 24%) $40,320


March sales (175,000 x [45%+24%]) $120,750
$161,070

2. Weasel Company has the following sales projections for 20X3:

January $200,000
February 210,000
March 225,000
April 230,000
May 245,000
June 240,000

Weasel collects 40% of its sales in the month of sale, 45% in the month following the sale and 13% in the
second month following the sale. Records show that sales were $225,000 in November and $208,000 in
December 20X2.

a. Prepare a schedule of cash receipts for the first three months of 20X3.
Solution:

January Collections:(13% x 225,000) $29,250


(45% x 208,000) $93,600
(40% x 200,000) $80,000
$202,850

February Collections:(13% x 208,000) $27,040


(45% x 200,000) $90,000
(40% x 210,000) $84,000
$201,040

March Collections: (13% x 200,000) $26,000


(45% x 210,000) $94,500
(40% x 225,000) $90,000
$210,500

b. What would be the accounts receivable (net of bad debts) balance on March 31, 20X3?
Solution:

February Sales (210,000 x 13%) $27,300


March Sales (225,000 x [45%+13%]) $130,500
$157,800

3. Amcar Inc. estimates its units sales for the coming months to be as follows:

March 280,000
April 260,000
May 250,000
June 230,000
July 240,000
August 225,000

Amcar maintains inventory at budgeted sales needs for the next month. March 1 inventory will be 248,000 units.

a. Prepare a monthly purchasing schedule for March through July.


Solution:

March Purchases (280,000 + 260,000 – 248,000) 292,000 units


April Purchases (260,000 + 250,000 – 260,000) 250,000 units
May Purchases (250,000 + 230,000 – 250,000) 230,000 units
June Purchases (230,000 + 240,000 – 230,000) 240,000 units
July Purchases (240,000 + 225,000 – 240,000) 225,000 units

4. Acme Inc. estimates its dollar sales for the coming months to be as follows.

June $340,000
July 360,000
August 300,000
September 260,000
October 240,000
November 200,000

Acme has an average gross margin of 40% of sales and maintains inventory at 75% of budgeted sales needs for the
next month. Acme began June with $150,000 in inventory.

a. Prepare a monthly purchasing schedule (in $) for as many months as is possible.


Solution:

June July August September October SALES


$340,000 $360,000 $300,000 $260,000 $240,000
X40% X0.40 X0.40 X0.40 X0.40 X0.40
COST OF SALES $136,000 $144,000 $120,000 $104,000 $96,000
+ End,Inv. $108,000 $90,000 $78,000 $72,000 $60,000
- Beg,Inv. ($150,000) ($108,000) (90,000) (78,000) (72,000) PURCHASES $94,000
$126,000 $108,000 $98,000 $84,000

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