ESSAY. Write your answer in the space provided or on a separate sheet of paper.
ID: 2430351 • Letter: E
Question
ESSAY. Write your answer in the space provided or on a separate sheet of paper. 8) Clay Company has projected sales and production in units for the second quarter of the coming year as follows: April 50,000 60,000 May 40,000 50.000 June 60.000 50.000 Sales Production Gash-related production costs are budgeted at $5 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 $100,000 per month. The accounts payable balance on March 31 totals $190,000, which will be paid in April All units are sold on account for $14 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 llowing the month of sale. Accounts receivable on April 1 totalled S500,000 (s90,000 from February's sales and the remainder from March). Required: a) Prepare a schedule for each month showing budgeted cash disbursements for Clay Company. b) Prepare a schedule for each month showing budgeted cash receipts for Clay Company.Explanation / Answer
298 answers
April
May
June
Sales
750,000
600,000
900,000
Cash Receipts from Account receivable
From February
90,000
From March
295,556
84,444
Cash receipt From Sale:
April Month
412,500
262,500
75,000
May Month
330,000
210,000
June Month
495,000
Total Cash Receipts
778,056
676,944
780,000
April
May
June
Sales
750,000
600,000
900,000
Cash Receipts from Account receivable
From February
90,000
From March
295,556
84,444
Cash receipt From Sale:
April Month
412,500
262,500
75,000
May Month
330,000
210,000
June Month
495,000
Total Cash Receipts
778,056
676,944
780,000
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