Answer to Requirement
1:
Budgeted Cash Collections for December = Accounts Receivable, Net +
(December Sales * 50%)
Budgeted Cash Collections for December = $48,000 + ($190,000 *
50%)
Budgeted Cash Collections for December = $48,000 + $95,000
Budgeted Cash Collections for December =
$143,000
Answer to Requirement
2:
Book Value of Accounts Receivable, December 31 = (December Sales *
50%) - (December Sales * 2%)
Book Value of Accounts Receivable, December 31 = ($190,000 * 50%) –
($190,000 * 2%)
Book Value of Accounts Receivable, December 31 = $95,000 -
$3,800
Book Value of Accounts Receivable, December 31 =
$91,200
Answer to Requirement
3:
Income / (Loss) before Income Taxes = Gross Margin – Operating
Expenses including Depreciation
Gross Margin = $190,000 * 30%
Gross Margin = $57,000
Depreciation per month = $144,000 / 12
Depreciation per month = $12,000
Income / (Loss) before Income Taxes = $57,000 - $15,200 -
$12,000
Income before Income Taxes = $29,800
Answer to Requirement
4:
Projected Balance in Inventory, December 31 = January Sales * Costs
* 80%
Projected Balance in Inventory, December 31 = $160,000 * 70% *
80%
Projected Balance in Inventory, December 31 =
$89,600
Answer to Requirement
5:
Budgeted Purchases for December = December Sales + Desired Ending
Inventory – Beginning Inventory
Budgeted Purchases for December = $190,000 + $89,600 -
$106,400
Budgeted Purchases for December = $173,200
Answer to Requirement
6:
Projected balance in Accounts Payable, December 31 = Budgeted
Purchases for December
Projected balance in Accounts Payable, December 31 =
$173,200
Goldberg Company is a retail sporting goods store that uses an accrual accounting system. Facts regarding its operation...
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: 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...
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