Question 1 Preparing an Accounts Payable Schedule Wight Inc. purchases raw mater
ID: 2475547 • Letter: Q
Question
Question 1
Preparing an Accounts Payable Schedule
Wight Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account:
Wight typically pays 25% on account in the month of billing and 75% the next month.
Required:
1. How much cash is required for payments on account in May?
$
2. How much cash is expected for payments on account in June?
$
Question 2
Schedule of Cash Collections on Accounts Receivable and Cash Budget
Lopez Inc. found that about 25% of its sales during the month were for cash. Lopez has the following accounts receivable payment experience:
Lopez's anticipated sales for the next few months are as follows:
Required:
1. Calculate credit sales for May.
$
Calculate credit sales for June.
$
Calculate credit sales for July.
$
Calculate credit sales for August.
$
2. Prepare a schedule of cash receipts for July and August. Round your answer to the nearest whole dollar, if necessary. If an amount box does not require an entry, leave it blank or enter "0". Be sure to enter percentages as whole numbers.
April $374,800 May 411,300 June 415,600Explanation / Answer
Answer 1
April
May
June
374800
411300
415600
25% in same month
93700
102825
103900
75% in next month
281100
308475
Total
93700
383925
412375
Answer 2
April
May
June
July
Aug
Sales
250000
290000
280000
295000
300000
25% cash sales
62500
72500
70000
73750
75000
75% on credit
187500
217500
210000
221250
225000
Bennett Inc.
Schedule of Cash Receipts
For July and August
July
August
Cash sales
73750
75000
Payments on account:
From May credit sales:
217500 × 5 %
10875
From June credit sales:
210000 ×68 %
142800
210000 × 5%
10500
From July credit sales:
221250 × 25 %
55312.5
221250 × 68 %
150450
From August credit sales:
225000 × 25 %
56250
Cash receipts
282737.5
292200
Answer 1
April
May
June
374800
411300
415600
25% in same month
93700
102825
103900
75% in next month
281100
308475
Total
93700
383925
412375
Answer 2
April
May
June
July
Aug
Sales
250000
290000
280000
295000
300000
25% cash sales
62500
72500
70000
73750
75000
75% on credit
187500
217500
210000
221250
225000
Bennett Inc.
Schedule of Cash Receipts
For July and August
July
August
Cash sales
73750
75000
Payments on account:
From May credit sales:
217500 × 5 %
10875
From June credit sales:
210000 ×68 %
142800
210000 × 5%
10500
From July credit sales:
221250 × 25 %
55312.5
221250 × 68 %
150450
From August credit sales:
225000 × 25 %
56250
Cash receipts
282737.5
292200
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