You have been asked to prepare the monthly cash budget for J

You have been asked to prepare the monthly cash budget for June and July for the Merchandise and Mercantile Company. The company sells a unique product that is specially made for it by a major product manufacturer. The selling price is $24.00 per unit. All sales are on account.

Merchandise purchases are also on account. The policy of the company is to purchase sufficient quantity of product to ensure that each month’s ending inventory is 50% of the following month’s expected sales quantity.

The assignment file contains extracts from the general journal showing the journal entries pertaining to certain relevant transactions that have occurred and a set of entries the bookkeeper has provided that indicate the transactions expected to occur affecting cash, accounts payable, accounts receivable, and merchandise inventory accounts due to the projected sales revenues and projected merchandise purchases on the master budget. This analysis, with other additional data, is shown below. Assume today is May 31, 20X1, and that all dollar amounts are in thousands of dollars.

Prepare a schedule showing the quantity of sales, ending inventory, beginning inventory and the quantity of product purchased in May, June, and July.

Use the price per unit of inventory purchased and the quantity purchased to determine the expenditure for purchases in May, June, and July.

Calculate the percentages of sales the company expects to collect in the month of the sale and in the two months following the sale. What is the percentage of uncollectible sales? Assume that the percentages calculated for the month for which data is provided also apply to sales for any month of the year.

Calculate the balance in the cash account on June 30, based on the transactions projected to occur in June. Use the collection and disbursement percentages previously calculated. Assume that fixed expenses occur evenly in each month of the year.

Prepare a cash budget for July, in good form. Use the collection and disbursement percentages previously calculated. (Amounts to be deducted should be indicated by a minus sign.)

You have been asked to prepare the monthly cash budget for June and July for the Merchandise and Mercantile Company. The company sells a unique product that is specially made for it by a major product manufacturer. The selling price is $24.00 per unit. All sales are on account.

Merchandise purchases are also on account. The policy of the company is to purchase sufficient quantity of product to ensure that each month’s ending inventory is 50% of the following month’s expected sales quantity.

The assignment file contains extracts from the general journal showing the journal entries pertaining to certain relevant transactions that have occurred and a set of entries the bookkeeper has provided that indicate the transactions expected to occur affecting cash, accounts payable, accounts receivable, and merchandise inventory accounts due to the projected sales revenues and projected merchandise purchases on the master budget. This analysis, with other additional data, is shown below. Assume today is May 31, 20X1, and that all dollar amounts are in thousands of dollars.

Information From Accounting Records and Planning Documents  DrCrExtracts From the May 31 Adjusted Trial Balance   May 31Cash4,300      Merchandise inventory9,600      Accounts receivable28,800      Accounts payable 4,125    Extracts From the General Journal   April 30Accounts receivable, April sales40,000             Revenue 40,000     Cash19,600             Accounts receivable, April sales 19,600     Bad debt expense, percentage of April sales1,600             Allowance for doubtful accounts 1,600       May 31Accounts receivable, May sales82,800             Revenue 82,800     Cash56,572             Accounts receivable, April sales 16,000            Accounts receivable, May sales 40,572     Merchandise inventory16,500             Accounts payable, May purchases 16,500     Accounts payable, May purchases12,375             Cash, payment May purchases 12,375    Projected Entries to the General Journal for SelectedAnticipated Transactions as per Master Budget   June 30Accounts receivable, June sales115,200             Revenue 115,200     Cost of sales for June19,200             Inventory 19,200     Accounts payable, May purchases4,125             Cash, May purchases 4,125     Cash2,800             Accounts receivable, April sales 2,800      July 31Accounts receivable, July sales86,880             Sales revenue 86,880      August 31Accounts receivable, August sales110,880             Sales revenue 110,880     Period fixed expenses, August2,400             Accumulated depreciation, August 700            Cash 1,700     Variable operating expenses (percent of sales)11,088             Cash 11,088    

Required:1.Calculate the cost per unit of merchandise inventory.  

2.

Prepare a schedule showing the quantity of sales, ending inventory, beginning inventory and the quantity of product purchased in May, June, and July.

3.

Use the price per unit of inventory purchased and the quantity purchased to determine the expenditure for purchases in May, June, and July.

4.

Calculate the percentages of sales the company expects to collect in the month of the sale and in the two months following the sale. What is the percentage of uncollectible sales? Assume that the percentages calculated for the month for which data is provided also apply to sales for any month of the year.

5.Calculate the percentages of May and June merchandise purchases the company expects to pay in June.   

6.Calculate the balance in the accounts receivable on June 30. Assume all receivables are due to sales on account.   

7.

Calculate the balance in the cash account on June 30, based on the transactions projected to occur in June. Use the collection and disbursement percentages previously calculated. Assume that fixed expenses occur evenly in each month of the year.

8.

Prepare a cash budget for July, in good form. Use the collection and disbursement percentages previously calculated. (Amounts to be deducted should be indicated by a minus sign.)

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Solution

Please post remaining part in seperate queston. as per chegg policy, if more than 4 sub parts, need to be posted in seperate que