Question

please help with these questions,

managerial cost accounting.. thank you

You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company's operations: a. The cash balance on December 1 is $58,600. b. Actual sales for October and November and expected sales for December are as follows: Cash sales Sales on account October November December $ 73,200 $ 78,000 $ 92,000 $ 485,000 $ 568,000 $ 663,000 Sales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible. c. Purchases of inventory will total $316,000 for December. Thirty percent of a month's inventory purchases are paid during the month of purchase. The accounts payable remaining from November's inventory purchases total $162,000, all of which will be paid in December d. Selling and administrative expenses are budgeted at $514,000 for December. Of this amount, $52,000 is for depreciation. e. A new web server for the Marketing Department costing $117,500 will be purchased for cash during December, and dividends totaling $12,500 will be paid during the month. f. The company maintains a minimum cash balance of $20,000. An open line of credit is available from the company's bank to increase its cash balance as needed. Required: 1. Calculate the expected cash collections for December. 2. Calculate the expected cash disbursements for merchandise purchases for December. 3. Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the following month.

Answer 1

Answer with working is given below

Cash Collections from customers December $87,300 $340,800 October Sales November Sales December Sales Cash sales Credit Sales Total cash collections from vendors $92,000 $132,600 $652,700 Cash Disbursement to Vendors November month December month Total payment to vendors December $162,000 $94,800 $256,800 $58,600 $652,700 $711,300 Ashton Company Cash Budget for the month of December Beginning Cash Balance Cash collection from customers Total Cash available Less: Cash disbursements Payment to suppliers for inventory Selling and administration expenses New Web Server Dividends paid Total Cash disbursements $256,800 $462,000 $117,500 $12,500 $848,800 -$137,500 $157,500 Excess or Deficiency of cash over disbursements Financing Borrowings Repayments Interest Total Financing Ending Cash Balance $157,500 $20,000