In: Accounting
TB Problem Qu. 8-217 Tilson Corporation has projected sales and ...
Tilson Corporation has projected sales and production in units for the second quarter of the coming year as follows:
April | May | June | |
Sales | 49,000 | 39,000 | 59,000 |
Production | 59,000 | 49,000 | 49,000 |
Cash-related production costs are budgeted at $6 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $60,000 per month. The accounts payable balance on March 31 totals $178,000, which will be paid in April.
All units are sold on account for $15 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totaled $477,000 ($97,000 from February's sales and $380,000 from March’s sales).
Required:
a. Prepare a schedule for each month showing budgeted cash disbursements for Tilson Corporation.
b. Prepare a schedule for each month showing budgeted cash receipts for Tilson Corporation.
Req 1 | Schedule for each month showing budgeted cash disbursement for Tilson Corporation | |||
April | May | June | ||
Production Cost | 354,000 | 294,000 | 294,000 | |
Cash Disbursement | ||||
Production cost this month (40%) | 141,600 | 117,600 | 117,600 | |
Production cost prior month (60%) | 178,000 | 212,400 | 176,400 | |
Selling and administrative | 60,000 | 60,000 | 60,000 | |
Total Disbursement | 379,600 | 390,000 | 354,000 | |
Req 2 | April | May | June | |
Total SALES | 735,000 | 585,000 | 885,000 | |
Cash Receipts: | ||||
February Sales | 97,000 | |||
March SALES | 380,000 | |||
April Sales | 441,000 | 220,500 | 73,500 | |
May Sales | 351,000 | 175,500 | ||
June Sales | 531,000 | |||
Total Receipts | 918,000 | 571,500 | 780,000 | |
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