QUESTION 3 Leaning Tower of Pizza, Inc. is preparing its master budget for its first year of business. It expects to sell 1,000 pizzas at $8 per pizza per month. It expects to collect 90% of the sales revenue in the month of the sale and 10% in the following month. Calculate its accounts receivable balance at the end of its first year.

QUESTION 3 Leaning Tower of Pizza, Inc. is preparing its master budget for its first year of business. It expects to sell 1,000 pizzas at $8 per pizza per month. It expects to collect 90% of the sales revenue in the month of the sale and 10% in the following month. Calculate its accounts receivable balance at the end of its first year.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 3EB: Barnstormer sells airplane accessories for $20 each. It expects sales of 120,000 units in quarter 1...

See similar textbooks

Similar questions

A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and the remainder are credit sales. The company finds that typically 10 percent of a months credit sales are paid in the month of sale, 70 percent are paid the next month, and 15 percent are paid in the second month after sale. Expected cash receipts in July are budgeted at what amount? a. 114,520 b. 143,150 c. 145,720 d. 156,000
Cash budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent 50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of 40,000, marketable securities of 75,000, and accounts receivable of 300,000 (60,000 from July sales and 240,000 from August sales). Sales on account for July and August were 200,000 and 240,000, respectively. Current liabilities as of September 1 include 40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 55,000 will be made in October. Bridgeports regular quarterly dividend of 25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of 50,000. Instructions Prepare a monthly cash budget and supporting schedules for September, October, and November. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
Cash budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the sale and the remainder the following month (second month after sale). Depreciation, insurance, and property tax expense represent 12,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in February, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of June 1 include cash of 42,000, marketable securities of 25,000, and accounts receivable of 198,000 (150,000 from May sales and 48,000 from April sales). Sales on account in April and May were 120,000 and 150,000, respectively. Current liabilities as of June 1 include 13,000 of accounts payable incurred in May for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 24,000 will be made in July. Mercury Shoes regular quarterly dividend of 15,000 is expected to be declared in July and paid in August. Management desires to maintain a minimum cash balance of 40,000. Instructions Prepare a monthly cash budget and supporting schedules for June, July, and August. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
Navigator sells GPS trackers for $50 each. It expects sales of 5,000 units in quarter 1 and a 5% increase each subsequent quarter for the next 8 quarters. Prepare a sales budget by quarter for the first year.
Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next months unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls. Required: 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget? FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high school. FlashKicks best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, FlashKick expects to sell the following: Required: 1. Construct a sales budget for FlashKick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter. 2. What if FlashKick added a third linetournament quality soccer balls that were expected to take 40 percent of the units sold of the match balls and would have a selling price of 45 each in January and February, and 48 each in March? Prepare a sales budget for Flash- Kick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter.
Relevant data from the Poster Companys operating budgets are: Additional data: Capital assets were sold in January for $10,000 and $4,500 in May. Dividends of $4,500 were paid in February. The beginning cash balance was $60,359 and a required minimum cash balance is $59,000. Use this information to prepare a cash budget for the first two quarters of the year
QUESTION 38 Pasta Disasta, Inc. is preparing its master budget for its first quarter of business. It expects to sell 1,000 pizzas per month. It will purchase enough pizzas so that 100 pizzas are in inventory at all times by purchasing 1,100 pizzas in the first month and 1,000 pizzas in the second and third months. The pizza is expected to cost $6 per pizza. It expects to pay 70% in the month of purchase and the remainder in the following month. Calculate the amount of accounts payable on its budgeted balance at the end of the quarter. Click Save and Submit to save and submit. Click Save All Answers to save all answers. 1 1 Q A 2 W S #3 E D $ 4 R 67 do % 5 FO MacBook Pro T < 6 V G & Y 7 H B * 00 8 U - J N O
QUESTION 5 Pasta Disasta, Inc. is preparing its master budget for its first quarter of business. It expects to sell 1,000 pizzas per month. It will purchase enough pizzas so that 100 pizzas are in inventory at all times by purchasing 1,100 pizzas in the first month and 1,000 pizzas in the second and third months. The pizza is expected to cost $6 per pizza. It expects to pay 70% in the month of purchase and the remainder in the following month. Calculate the amount of accounts payable on its budgeted balance at the end of the quarter.
QUESTION 34 Leaning Tower of Pizza, Inc. is preparing its master budget for its first quarter of business. It expects to sell 1,000 pizzas at $8 per pizza per month. It expects to collect 90% of the sales in the month of the sale and 10% in the following month. Calculate its accounts receivable balance at the end of its first quarter.
QUESTION 4 Pasta Disasta, Inc. is preparing its master budget for its first quarter of business. It expects to sell 2,000 pizzas per month. It will purchase enough pizzas so that 100 pizzas are in inventory at all times. The pizza is expected to cost $4 per pizza. It expects to pay 70% in the month of purchase and the remainder in the following month. Calculate the amount of budgeted purchases for its first quarter.
Question 3: Nizwa Pharmacy is developing its fourth-quarter monthly cash budget for 2021. On nvestigation, the following actual and expected sales information was revealed- August September October November December 41,500 38,000 29,000 34,000 39,500 Of a given month's sales, 40 percent are typically collected in the month of sale. Thirty percent of a given month's sales are collected in the month following the sale. The remaining 30 percent are collected in the second month following the month of the sale. Bad debts are negligible and should be ignored. Prepare a schedule of cash collections for Nizwa Pharmacy Company by month for fourth quarter of 2021.
QUESTION 3 Parker Corp., which operates on a calendar year, expects to sell 5140 units in January and expects sales to increase 190 units each month thereafter. Sales price is expected to stay constant at $9 per unit. What are budgeted revenues for February?