Prepare a cash collections budget for each of the months

Reference no: EM131190905

Problem - Prepare a Financial Report by using the following Data:

The Alec Corporation sells inflatable pools. On June 30, there were 105 pools in ending inventory, and accounts receivable had a balance of $12,000. Sales of inflatable pools (in units) have been budgeted at the following levels for the upcoming months:

Account receivable, June 30	$12,000
Number of pools budgeted to be sold in July	350
Number of pools budgeted to be sold in August	420
Number of pools budgeted to be sold in September	370
Number of pools budgeted to be sold in October	300

The company has a policy that the ending inventory of inflatable pools should be equal to 30% of the number of pools to be sold in the following month. The Outdoor Leisure Store sells the inflatable pools for $100 each. The company's collection history shows that 30% of the sales in a month are paid for by customers in the month of sale, while the remainder is collected in the following month.

Required:

a. Prepare a merchandise purchases budget showing how many pools should be purchased in each of the months including July, August, and September.

b. Prepare a cash collections budget for each of the months including July, August, and September.

Reference no: EM131190905

Questions Cloud

How many shares of stock are received on conversion : Lucky Dog Pet Food has a $1000 convertible bond outstanding with a conversion price of $12.00 per share. The bond pays an interest payment of $80 annually and matures in 20 years unless converted into common stock earlier or called by the company. Ho..

Determine the donna ahern capital as of december 31 2009 : Using the accounting equation and considering each case independently, determine the following amounts: Donna Ahern, capital, as of December 31, 2009.

United states department of agriculture : According to the dietary guidelines from the United States Department of Agriculture, a healthful diet consists of fruits, vegetables, whole grains, lean protein, and dairy.

What is your own experience of friendships with persons : In what ways might it be possible for persons who are differently abled to enjoy deep and meaningful friendships compared with those outside of the community? What are the challenges?

Prepare a cash collections budget for each of the months : Prepare a merchandise purchases budget showing how many pools should be purchased in each of the months including July, August, and September. Prepare a cash collections budget for each of the months including July, August, and September

The formula for the present value of an annuity : Look at the formula for the present value of an annuity. What happens to the present value as the number of periods increases? What distinguishes an annuity from a perpetuity? Why is there no formula for the future value of a perpetuity?

Standard deviations from the mean : One indicator of an outlier is that an observation is more than 2.5 standard deviations from the mean. Consider the data value 80.(a) If a data set has mean 70 and standard deviation 5, is 80 a suspect outlier?

Review entire list of talk on the creative spark ted channel : Review the entire list of talks on the "Creative Spark" TED channel. Select one talk that is of interest to you, and watch it in its entire length.

What happens to the present value of a cash-flow stream : What happens to the present value of a cash-flow stream when the discount rate increases? Place this in the context of an investment. If the required return on an investment goes up but the expected cash flows do not change, would you be willing to p..

User Account

All Pages