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##### The Doley Company_Budgets

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Question;The Doley Company has planned the following sales for;the next three months;January;February;March;Budgeted Sales;\$40,000;\$50,000;\$70,000;Sales are made 20% for cash and 80% on account. From;experience, the company has learned that a month's sales on account are;collected according to the following pattern;Month of sale;60%;First month following sale;30%;Second month following sale;8%;Uncollectible;2%;The company requires a minimum cash balance of \$5,000;to start a month. The beginning cash balance in March is budgeted to be \$6,000.;Required;a) Compute the budgeted;cash receipts for March. Rember to think in terms of when actual cash;is planned to be received. If you are not going to receive the cash it is not;part of the budget. Also pay close attention to cash vs credit sales;b) The following;additional information has been provided for March;Inventory;purchases (all paid in cash in March);\$28,000;Operating;Expenses (all paid in cash in March);\$40,000;Depreciation;expense for March;\$5,000;Dividends;paid in March;\$4,000;Prepare a cash budget in good form for the month of;March, using this information and the budgeted cash receipts you computed for;part a) above. The company can borrow in any dollar amount and will not pay;interest until April.

Paper#38238 | Written in 18-Jul-2015

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