Question

In: Accounting

Date: May 2, Year 7 To: Melissa Shaw, Accountant II From: Robert Widerman, Accounting Manager Re:...

Date: May 2, Year 7

To: Melissa Shaw, Accountant II

From: Robert Widerman, Accounting Manager

Re: Cash budgets and forecasts

Hi Melissa,

Please update the cash portion of the revised budget for May and June. The budget includes a cash collections forecast, a cash payments forecast, and an estimate of the cash balance for the balance sheet. These will also be used in the cash flow statement.

In the past, 70% of credit sales are collected in the month of sale, 20% the month after the sale, and 9% the second month following the sale. The remainder is usually not collected and is written off through the allowance for uncollectible accounts.

May and June purchases are forecasted to be $54,000 and $70,000, respectively. Payments are made at the time of purchase to obtain a 2% discount. We also expect other cash payments of $14,400 in May and $15,100 in June.

May and June sales are forecasted to be $66,000 and $72,000, respectively.

Thanks,

Robert

Babbit’s Rabbits

Bank Reconciliation

April Year 7

Bank balance per statement

$23,053.96

Difference

(1,053.96)

Bank balance per accounts (cashbook)

22,000.00

Reconciling items

(1,053.96)

Babbit’s Rabbits

Schedule of Sales and Purchases

January - April, Year 7

Month

Sales

Purchases

Jan.

$72,000

$42,000

Feb.

$66,000

$48,000

Mar.

$60,000

$36,000

Apr.

$78,000

$54,000

Total to Date

$276,000

$180,000

Complete Babbit's Rabbits' forecasted cash balances for the months of May and June. Enter the appropriate amounts in the associated cells. Enter cash inflows as positive numbers; enter cash outflows as negative numbers using a leading minus (-) sign.

	May	June
1. Beginning cash balance
2. Inflows
3. Outflows
4. Ending cash balance

Expert Solution

	May	June
1. Beginning cash balance	$ 22,000.00	$ 21,880.00
2. Inflows	$ 67,200.00	$ 70,620.00
3. Outflows	$ (67,320.00)	$ (83,700.00)
4. Ending cash balance	$ 21,880.00	$ 8,800.00

Cash Inflows:
	January	February	March	April	May	June
January	$50,400	$14,400	$6,480
February		$46,200	$13,200	$5,940
March			$42,000	$12,000	$5,400
Apr				$54,600	$15,600	$7,020
May					$46,200	$13,200
June						$50,400
Total Cash Inflow	$50,400	$60,600	$61,680	$72,540	$67,200	$70,620

Cash outflows	May	June
Purchases Payment	$ 52,920	$ 68,600
Other Payment	$ 14,400	$ 15,100
Total outflows	$ 67,320	$ 83,700

ekkarill92 answered 3 years ago

Memo To: INS 210 Students From: Ken Goldstein Date: 2/12/18 Re: Insurance C

Memo To: INS 210 Students From: Ken Goldstein Date: 2/12/18 Re: Insurance Company Operations (In-Class Assignment) You have assumed a new product management role for a specialty insurance company. Your assignment is to assess the insurance company operation requirements to profitably lead a media and entertainment division as follows: 1. Rate Making - What would you want to know about the business to determine proper rate making? 2. Underwriting - How might you underwrite different types of media and entertainment...

The FASB issues new standards on accounting. The implementation date is usually a year from the...

The FASB issues new standards on accounting. The implementation date is usually a year from the date of issuance with early implementation encouraged. Jane Durham, chief accountant is discussing implementing this new standard as soon as possible. The CFO however realizes that an early implementation will have a negative effect on the firm's net income for the year. The CFO discourages the chief Accountant from implementing the standard until the required date. Is the CFO's action proper? Why or why...

Memo 2 To: Pricing Manager, Austin From: Vice President, Marketing Re: Google Fiber As you are...

Memo 2 To: Pricing Manager, Austin From: Vice President, Marketing Re: Google Fiber As you are aware, Google has been entering select markets with its Google Fiber service that competes directly with our high-speed data and video services. Even though its market penetration has been moderate, Google has deep pockets and excellent brand awareness. As a result, we are paying close attention to markets that it is entering. Within the last year, we completed our own fiber upgrade in the...

From Harvard Business HBX CORe 2020 May - Financial Accounting - Module 7 Share a link...

From Harvard Business HBX CORe 2020 May - Financial Accounting - Module 7 Share a link to a news report of a company where the financial forecast went spectacularly wrong and describe what you find particularly interesting or notable about it.

2. The following data from the just completed year are taken from the accounting records of...

2. The following data from the just completed year are taken from the accounting records of Mason Company: sales $700,000 direct labor cost $100,000 raw material purchase $115,000 selling expenses $150,000 administrative expenses $65,000 Manufacturing overhead applied to work in process $100,000 Actual manufacturing overhead costs $120,000 Inventories Beginning Ending Raw materials $10,000 $15,000 Work in process $10,000 $2,000 Finished goods $20,000 $35,000 a) Prepared a schedule of cost of goods manufactured. Assume all raw materials used in production were...

Purchase Receipt 1 Purchase Receipt 1 - Equipment Purchase Date: 7/1/Year 2 Purchase Amount: $600,000 Purchase...

Purchase Receipt 1 Purchase Receipt 1 - Equipment Purchase Date: 7/1/Year 2 Purchase Amount: $600,000 Purchase Receipt 2 Purchase Receipt 2 - Machine Set Purchase Date: 1/1/Year 5 Purchase Amount: $600,000 Purchase Receipt 3 Purchase Receipt 3 - Land Purchase Date: 1/1/Year 3 Purchase Amount: $650,000 Scroll down to complete all parts of this task. At December 31, Year 5, Aaron Co. had the following property, plant, and equipment: Asset Fair Value Cost to Sell Present Value of All Cash...

The following data are from the accounting records of Niles Castings for year 2. Units produced...

The following data are from the accounting records of Niles Castings for year 2. Units produced and sold 88,000 Total revenues and costs Sales revenue $ 340,000 Direct materials costs 70,000 Direct labor costs 36,000 Variable manufacturing overhead 17,000 Fixed manufacturing overhead 43,000 Variable marketing and administrative costs 16,500 Fixed marketing and administrative costs 37,000 a. Prepare a gross margin income statement. b. Prepare a contribution margin income statement.

Question 2 John recently graduated from the three-year accounting program at George Brown College. During his...

Question 2 John recently graduated from the three-year accounting program at George Brown College. During his co-op term he worked for a small audit firm and decided to make that his career. After graduation, he was hired by Rowlands Marcellin and Khan, LLP, a national audit firm. On starting, John spent the first day meeting the staff and partners in his office. His staff manager took John to lunch for a casual conversation. During the lunch they talked about a...