Explore BrainMass

Explore BrainMass

    Binghamton Film Corporation: Expected Cash Collections

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The following information is from Binghamton Film Corporation's financial records.

    Month Sales Purchases
    April $ 72,000 $ 42,000
    May 66,000 48,000
    June 60,000 36,000
    July 78,000 54,000

    Collections from customers are normally 70 percent in the month of sale, 20 percent in the month following the sale, and 9 percent in the second month following the sale. The balance is expected to be uncollectible. All purchases are on account. Management takes full advantage of the 2 percent discount allowed on purchases paid for by the tenth of the following month. Purchases for August are budgeted at $60,000, and sales for August are forecasted at $66,000. Cash disbursements for expenses are expected to be $14,400 for the month of August. The company's cash balance on August 1 was $22,000.

    Required:
    1. Prepare the expected cash collections schedule during August.

    BINGHAMTON FILM CORPORATION
    EXPECTED CASH COLLECTIONS
    AUGUST

    Month Sales Percent Expected collections
    June $ ? ? % $ ?
    July ? ? % ?
    August ? ? % ?

    ___________

    Total $ $ ????

    2. Prepare the expected cash disbursements schedule during August.

    BINGHAMTON FILM CORPORATION
    EXPECTED CASH COLLECTIONS
    AUGUST

    July purchases to be paid in August $ ------------------------------------- ??

    (Click to select)Add : 2% cash discountLess : 2% cash discount

    Net $ ----------------------------------------------------------------------- ???

    Cash disbursements for expenses ------------------------------------ ???

    ________
    Total $ -------------------------------------------------------------------- $ ???

    3. Calculate the expected cash balance on August 31.

    Expected cash balance $ ???

    © BrainMass Inc. brainmass.com June 4, 2020, 2:10 am ad1c9bdddf
    https://brainmass.com/business/accounting/binghamton-film-corporation-expected-cash-collections-443148

    Solution Summary

    This solution prepares the expected cash collections schedule, the expected cash disbursements schedule, and calculates the expected cash balance.

    $2.19

    ADVERTISEMENT