Requirement 1. Prepare a statement of estimated cash receipts and disbursements for October 20X7 for the Botanica Company. Before we prepare the statement of estimated cash receipts and disbursements, let's prepare a schedule of collections of accounts receivable, a purchases budget and a schedule of payments for merchandise. Begin by preparing the schedule of collections of accounts receivable. Schedule 1, Collections of accounts receivable August sales September sales October sales Total October collections Now prepare the purchases budget for September and October. Schedule 2, Purchases budget Desired ending inventory September October Plus: Cost of goods sold Total merchandise needed Less: Beginning inventory Required purchases Next prepare the schedule of payments for merchandise. (Round your answers to the nearest whole dollar.) Schedule 3, Payments for merchandise Payments for October purchases Payments for September purchases Disbursements for purchases October Prepare a statement of estimated cash receipts and disbursements for October 20X7 for the Botanica Company. Botanica Company Statement of Estimated Cash Receipts and Disbursements For the Month Ended October 31, 20X7 Beginning Cash, September 30, 20X7 Cash Reciepts: Collections from receivables Total cash available during October Cash Disbursements: Merchandise purchases Variable expenses Fixed expenses Ending Cash, October 31, 20X7 DR CR Cash 4,900 Accounts receivable 17,700 Allowance for bad debts 1,800 Merchandise inventory 11,250 Accounts payable, merchandise 5,250 Print Done Sales terms include a 2% discount if payment is made by the end of the calendar month. Past experience indicates that 65% of sales will be collected during the month of the sale, 15% in the following calendar month, 15% in the next following calendar month, and the remaining 5% will be uncollectible. The company's fiscal year begins August 1. Unit selling price August actual sales $ 20 18,000 September actual sales 36,000 October actual sales 30,000 November estimated sales 24,000 Total sales expected in the fiscal year $ 560,000

Requirement 1. Prepare a statement of estimated cash receipts and disbursements for October 20X7 for the Botanica Company. Before we prepare the statement of estimated cash receipts and disbursements, let's prepare a schedule of collections of accounts receivable, a purchases budget and a schedule of payments for merchandise. Begin by preparing the schedule of collections of accounts receivable. Schedule 1, Collections of accounts receivable August sales September sales October sales Total October collections Now prepare the purchases budget for September and October. Schedule 2, Purchases budget Desired ending inventory September October Plus: Cost of goods sold Total merchandise needed Less: Beginning inventory Required purchases Next prepare the schedule of payments for merchandise. (Round your answers to the nearest whole dollar.) Schedule 3, Payments for merchandise Payments for October purchases Payments for September purchases Disbursements for purchases October Prepare a statement of estimated cash receipts and disbursements for October 20X7 for the Botanica Company. Botanica Company Statement of Estimated Cash Receipts and Disbursements For the Month Ended October 31, 20X7 Beginning Cash, September 30, 20X7 Cash Reciepts: Collections from receivables Total cash available during October Cash Disbursements: Merchandise purchases Variable expenses Fixed expenses Ending Cash, October 31, 20X7 DR CR Cash 4,900 Accounts receivable 17,700 Allowance for bad debts 1,800 Merchandise inventory 11,250 Accounts payable, merchandise 5,250 Print Done Sales terms include a 2% discount if payment is made by the end of the calendar month. Past experience indicates that 65% of sales will be collected during the month of the sale, 15% in the following calendar month, 15% in the next following calendar month, and the remaining 5% will be uncollectible. The company's fiscal year begins August 1. Unit selling price August actual sales $ 20 18,000 September actual sales 36,000 October actual sales 30,000 November estimated sales 24,000 Total sales expected in the fiscal year $ 560,000

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter7: Receivables And Investments

Section: Chapter Questions

Problem 7.4E

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