1 | Total Budgeted cash collections: | ||||||
Gross accounts receivable balance=76000+4000=$ 80000 | |||||||
This represents the balance 50% to be paid for the November sales (50% already paid in November) | |||||||
Hence,November sales=80000/50%=$ 160000 | |||||||
Then,collected in December=160000*48%=$ 76800 | |||||||
December sales=$ 250000 | |||||||
Then,collected in December=250000*50%=$ 125000 | |||||||
2 | Book value of accounts receivable at the end of December: | ||||||
Accounts receivable (Gross)=50% of December month sales=250000*50%=$ 125000 | |||||||
Bad debts written off=November month sales*2%=160000*2%=$ 3200 | |||||||
Allowance for doubtful accounts at the end of December=Beginning balance-Bad debts written off=4000-3200=$ 800 | |||||||
Book value of accounts receivable at the end of December=Accounts receivable (Gross)-Allowance for doubtful accounts at the end of December=125000-800=$ 124200 | |||||||
3 | Income (loss) before income taxes: | ||||||
$ | $ | ||||||
Gross margin | |||||||
(Sales*30%) | (250000*30%) | 75000 | |||||
Less: | |||||||
Operating expenses | 25000 | ||||||
Depreciation expense | (216000/12) | 18000 | 43000 | ||||
Income (loss) before income taxes | 32000 | ||||||
4 | Projected balance in inventory on Dec 31,2019=Next month sales*80%=225000*80%=$ 180000 | ||||||
5 | Budgeted purchases: | ||||||
$ | |||||||
Sales | 250000 | ||||||
Add: Projected ending inventory | 180000 | ||||||
430000 | |||||||
Less:Beginning inventory | 132000 | ||||||
Budgeted purchase | 298000 | ||||||
6 | Projected balance in accounts payable on Dec 31,2019=Budgeted purchase for December=$ 298000 | ||||||
(Since,payment for purchase made in the next month of purchase) | |||||||
I appreciate your ratings |
10-49 Budgeting for a Merchandising Firm Goldberg Company is a retail sporting goods store that uses...
Ch 10, #9 Goldberg Company is a retail sporting goods store that uses an accrual accounting system. Facts regarding its operations follow: Sales are budgeted at $280,000 for December and $250,000 for January, terms 1/eom, n/60. Collections are expected to be 50% in the month of sale and 48% in the month following the sale. Two percent of sales are expected to be uncollectible and recorded in an allowance account at the end of the month of sale. Bad debts...
Goldberg Company is a retail sporting goods store that uses an accrual accounting system. Facts regarding its operations follow: 1. Sales are budgeted at $330,000 for December and $300,000 for January, terms 1/eom, n/60. • Collections are expected to be 50% in the month of sale and 48% in the month following the sale. Two percent of sales are expected to be uncollectible and recorded in an allowance account at the end of the month of sale. Bad debts expense...
Goldberg Company is a retail sporting goods store that uses an accrual accounting system. Facts regarding its operations follow: Sales are budgeted at $200,000 for December and $170,000 for January, terms 1/eom, n/60. Collections are expected to be 50% in the month of sale and 48% in the month following the sale. Two percent of sales are expected to be uncollectible and recorded in an allowance account at the end of the month of sale. Bad debts expense is included...
Goldberg Company is a retail sporting goods store that uses an accrual accounting system. Facts regarding its operations follow: Sales are budgeted at $190,000 for December and $160,000 for January, terms 1/eom, n/60 Collections are expected to be 50% in the month of sale and 48% in the month following the sale. Two percent of sales are expected to be uncollectible and recorded in an allowance account at the end of the month of sale. Bad debts expense is included...
Goldberg Company is a retail sporting goods store that uses an accrual accounting system. Facts regarding its operations follow: Sales are budgeted at $190,000 for December and $160,000 for January, terms 1/eom, n/60 Collections are expected to be 50% in the month of sale and 48% in the month following the sale. Two percent of sales are expected to be uncollectible and recorded in an allowance account at the end of the month of sale. Bad debts expense is included...
Goldberg Company is a retail sporting goods store that uses an accrual accounting system. Facts regarding its operations follow: . Sales are budgeted at $220,000 for December and $190,000 for January, terms 1/eom, n/60 ·Collections are expected to be 50% in the month of sale and 48% in the month following the sale. Two percent of sales are expected to be uncollectible and recorded in an allowance account at the end of the month of sale. Bad debts expense is...
Goldberg Company is a retail sporting goods store that uses an accrual accounting system. Facts regarding its operations follow: Sales are budgeted at $190,000 for December and $160,000 for January, terms 1/eom, n/60. Collections are expected to be 50% in the month of sale and 48% in the month following the sale. Two percent of sales are expected to be uncollectible and recorded in an allowance account at the end of the month of sale. Bad debts expense is included...
Village Hardware is a retail hardware store. Information about the store's operations follows. • November 20x4 sales amounted to $570,000. • Sales are budgeted at $610,000 for December 20x4 and $570,000 for January 20x5. • Collections are expected to be 70 percent in the month of sale and 28 percent in the month following the sale. Two percent of sales are expected to be uncollectible. Bad debts expense is recognized monthly. • The store’s gross margin is 25 percent of...
Sports Fanatic Company is a retail sporting goods store that uses accrual accounting for its records. Information on Sports Fanatic’s operations are as follows: 1. The store has budgeted sales at $220,000 for January and $200,000 for February. 2. It expects collections to be 60% in the month of sale and 38% in the month following the sale. It expects 2% of sales to be uncollectible. 3. Gross margin is 25% of sales. 4. It purchases a total of 80%...
Handy Hardware is a retail hardware store. Information about the stores operations follows. • November 20x1 sales amounted to $410,000. • Sales are budgeted at $450,000 for December 20x1 and $410,000 for January 20x2. • Collections are expected to be 70 percent in the month of sale and 28 percent in the month following the sale. Two percent of sales are expected to be uncollectible. Bad debts expense is recognized monthly. The store's gross margin is 30 percent of its...