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Prepare schedule of cash collections and cash payments

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Pet Joy Wholesale Inc., a pet wholesale supplier, was organized on May 1, 2010. Projected sales for each of the first three months of operations are as follows:

May $340,000
June 460,000
July 610,000

The company expects to sell 11% of its merchandise for cash. Of sales on account, 53% are expected to be collected in the month of the sale, 42% in the month following the sale, and the remainder in the second month following the sale.

Prepare a schedule indicating cash collections from sales for May, June, and July.

PET JOY WHOLESALE INC.
Schedule of Collections from Sales
For the Three Months Ending July 31, 2010
May June July
Receipts from cash sales:
Cash sales
May sales on account:
Collected in May
Collected in June
Collected in July
June sales on account:
Collected in June
Collected in July
July sales on account:
Collected in July
Total cash collected:

Excel Learning Systems Inc. was organized on May 31, 2010. Projected selling and administrative expenses for each of the first three months of operations are as follows:

June $155,100
July 145,800
August 132,700

Depreciation, insurance, and property taxes represent $33,000 of the estimated monthly expenses. The annual insurance premium was paid on May 31, and property taxes for the year will be paid in December. Of the remainder of the expenses, 59% are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month.

Prepare a schedule indicating cash payments for selling and administrative expenses for June, July, and August. Enter all amounts as positive numbers.

EXCEL LEARNING SYSTEMS INC.
Schedule of Cash Payments for Selling and Administrative Expenses
For the Three Months Ending August 31, 2010

June July August
June expenses:
Paid in June
Paid in July
July expenses:
Paid in July
Paid in August
August expenses:
Paid in August
Total cash payments

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Solution Summary

Your tutorial is in Excel attached. Click in the cells to see the computations.

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Similar Posting

Lorch Co: Prepare schedule of expected collections, matierals payments, cash budget

Lorch Company prepares monthly cash budgets. Relevant data from operating budgets for 2010 are:

January February
Sales $360,000 $400,000
Direct Material Purchases 100,000 110,000
Direct Labor 100,000 115,000
Manufacturing overhead 60,000 75,000
Selling and administrative expense 75,000 80,000

All sales are on account. Collections are expected to be 60% in the month of sale, 30% in the first month following the month of sale, and 10% in the second month following the month of sale. Thirty percent (30%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the month of purchase. All other items above are paid in the month incurred. Depreciation has been omitted from manufacturing overhead and selling and administrative expenses.

Other data:
1. Credit sales: November 2009, $200,000; December 2009, $280,000
2. Purchases of direct materials : December 2009, $90,000
3. Other receipts: January - Collection of December 31, 2009 interest receivable $3,000
February - Proceeds from sale of securities $5,000
4. Other disbursements: February â?" payment of $20,000 for land.

The company's cash balance on January 1, 2010, is expected to be $60,000. The company wants to maintain a minimum cash balance of $50,000.

Instructions:

1. Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases.
2. Prepare a cash budget for January and February in columnar form.

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