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Author Question: Sedona Gear Company, a rapidly growing distributor of camping equipment, is formulating its plans ... (Read 105 times)

jordangardner

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Sedona Gear Company, a rapidly growing distributor of camping equipment, is formulating its plans for the coming year. Cody Mosbay, the firm's marketing director, has completed the following sales forecast.

  Month  Sales   Month  Sales
January$   900,000July$1,900,000
February1,000,000August1,900,000
March   900,000September1,600,000
April1,200,000October1,600,000
May1,500,000November1,800,000
June1,900,000December2,000,000
Patti Bodkin, an accountant in the Planning and Budgeting Department, is responsible for preparing the cash flow projection. She has gathered the following information.
All sales are made on credit.
Sedona's excellent record in accounts receivable collection is expected to continue,
with 65 percent of billings collected in the month after sale and the remaining 35 percent collected in the second month after the sale.
Cost of goods sold, Sedona's largest expense, is estimated to equal 45 percent of sales
dollars. Seventy percent of inventory is purchased one month prior to sale and 30 percent during the month of sale. For example, in April, 30 percent of April cost of goods sold is purchased and 70 percent of May cost of goods sold is purchased.
All purchases are made on account. Historically, 70 percent of accounts payable have
been paid during the month of purchase, and the remaining 30 percent in the month following purchase.

Required:

a.Prepare the cash receipts budget for the second quarter. Omit the heading.
b.Prepare the purchases budget for the second quarter. Omit the heading.
c.Prepare the cash payments budget for the second quarter. Omit the heading.


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Marked as best answer by jordangardner on Feb 5, 2023

zubair1583

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jordangardner

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Reply 2 on: Feb 5, 2023
YES! Correct, THANKS for helping me on my review


Jossy

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Reply 3 on: Yesterday
Wow, this really help

 

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