month after sales There are cash sales each month equal to 5

month after sales. There are cash sales each month equal to 50% of total sales. The total sales for the first quarter were estimated as follows: $30,000 $20,000 $25,000 January: February: March: What amount would be the projected cash collections for March? A. 12,000 B. 24,000 C. 24,500 D. 25,000 2) Gibor Corp. is preparing the cash budget for December 20x1. The payment pattern for the purchase of merchandise has been 75% in the month of sale, 15% in the first month after sale, and the rest in the second month after sales. The company usually receives a 10% discount on all purchases. Accounts payable on January 1\'t was $25,000. The total purchase for the third quarter were estimated as follows: $50,000 October November: $75,000 December: $100,000 What amount would be the projected cash payments for January? A. 52,875 B. 58,750 C. 82,125 D. 100,000 For questions 3 and 4, consider the following information: Nice Co., distributor of candy, has reported the following budget assumptions for 20x1: No change in candles inventory level; cash disbursement to candy manufacturer, $250,000; target accounts payable ending balance for year 1 is 125% of accounts payable beginning balance; and sales price is set at a markup of 40% of the candy purchase price. The candy manufacturer is Nice\'s only vendor, and all purchases are made on credit. The accounts payable has a balance of $150,000 at the beginning of 20x1. 3) What is Nice\'s cost of goods sold for 20x1? A. $162,500 B. $250,000 C. $287,500 D. $312,500 4) What is Nice\'s sales for 20x1? A. $302,500 B. $350,000 C. $359,375 D. $402,500

Solution

3). Cost of Goods Sold :-

= Cash Disbursement + Ending Balance - Opening Balance

= $250000 + ($150000*125%) - $150000

= $250000 + $187500 - $150000

= $287500

4). Sales :-

= Cost of Goods Sold + 40% of Cost of Goods Sold

= $287500 + (40% * $287500)

= $287500 + $115000

= $402500

5). Estimated Cash Disbursement for inventories :-

= Cost of Goods Sold + Decrease in Account Payable - Decrease in Inventories

= ($2000000 * (1 - 0.25)) + $250000 - $100000

= $1500000 + $250000 - $100000

= $1650000

6). Glory Produce :-

= Projected Sales + Ending Balance - Beginning Balance

= 2500 + 750 - 500

= 2750 units