Question

The following information is from White Mountain Furniture Showroom’s financial records.

Month	Sales			Purchases
July	$	79,000		$	61,000
August		76,000			51,000
September		66,000			39,000
October		81,000			57,000

Collections from customers are normally 65 percent in the month of sale, 16 percent in the month following the sale, and 18 percent in the second month following the sale. The balance is expected to be uncollectible. All purchases are on account. Management takes full advantage of the 3 percent discount allowed on purchases paid for by the tenth of the following month. Purchases for November are budgeted at $62,000, and sales for November are forecasted at $68,000. Cash disbursements for expenses are expected to be $15,200 for the month of November. The company’s cash balance on November 1 was $31,000.

. Prepare the schedule for expected cash collections during November.
WHITE MOUNTAIN FURNITURE SHOWROOM Expected Cash Collections November Month Sales Percent Expected Collections % % % Total

Prepare the schedule for expected cash disbursements during November
	WHITE MOUNTAIN FURNITURE SHOWROOM Expected Cash Disbursements November October purchases to be paid in November Net Cash disbursements for expenses Total

Prepare the schedule for expected cash balance on November 30.
	WHITE MOUNTAIN FURNITURE SHOWROOM Expected Cash Balance November 30 Balance, November 1 Expected balance

Answer 1

WHITE MOUNTAIN FURNITURE SHOWROOM
Expected Cash Collections
November
Month	Sales	Percent		Expected Collections
September	66,000	18	%	11,880
October	81,000	16	%	12,960
November	68,000	65	%	44,200
Total				69,040

WHITE MOUNTAIN FURNITURE SHOWROOM
Expected Cash Disbursements
November
October purchases to be paid in November	57,000
Discount 3%	1,710
Net	55,290
Cash disbursements for expenses	15,200
Total	70,490

WHITE MOUNTAIN FURNITURE SHOWROOM
Expected Cash Balance
November 30
Balance, November 1	31,000
Add: Expected Collections	69,040
Less: Expected cash Disbursements	70,490
Expected Balance	29,550