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ACC - Excerise E22-24, E22-27, E22-56

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Question;E22-24 Preparing an operating budgetDunbar Company manufactures drinking glasses. One unit is a package of 8 glasses, which sells for $20. Dunbar projects sales for April will be 3,000 packages, with sales increasing by 100 packages per month for May, June, and July. On April 1, Dunbar has 250 packages on hand but desires to maintain an ending inventory of 10% of the next month?s sales. Prepare a sales budget and a production budget for Dunbar for April, May, and June.May pkg. produced 3,110E22-27 Preparing a financial budgetCramer Company projects the following sales for the first three months of the year: $12,500 in January, $13,240 in February, and $14,600 in March. The company expects 70% of the sales to be cash and the remainder on account. Sales on account are collected 50% in the month of the sale and 50% in the following month. The Accounts Receivable account has a zero balance on January 1. Roundto the nearest dollar.Requirements1. Prepare a schedule of cash receipts for Cramer for January, February, and March. What is the balance in Accounts Receivable on March 31?2. Prepare a revised schedule of cash receipts if receipts from sales on account are 60% in the month of the sale, 30% in the month following the sale, and 10% in the second month following the sale. What is the balance in Accounts Receivable on March 31?P22-56 Preparing a financial budgetThis problem continues the Davis Consulting, Inc. situation from Problem P21-63 of Chapter 21. Assume Davis Consulting began January with $29,000 cash. Management forecasts that cash receipts from credit customers will be $49,000 in January and $51,500 in February. Projected cash payments include equipment purchases ($17,000 in January and $40,000 in February) and selling and administrative expenses ($6,000 each month).Davis?s bank requires a $20,000 minimum balance in the firm?s checking account. At the end of any month when the account balance falls below $20,000, the bank automatically extends credit to the firm in multiples of $5,000. Davis borrows as little as possible and pays back loans each month in $1,000 increments, plus 5% interest on the entire unpaid principal. The first payment occurs onemonth after the loan.Requirements1. Prepare Davis Consulting?s cash budget for January and February 2013.2. How much cash will Davis borrow in February if cash receipts from customers that month total $21,500 instead of $51,500?

 

Paper#41659 | Written in 18-Jul-2015

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