Author Question: Starfish Industries' sales budget for the first quarter of the upcoming year shows budgeted sales of ... (Read 33 times)

jlol3 · **on:** Feb 5, 2023

Question 1

Pro-forma financial statements are
◦ not a component of the master budget.
◦ based on historical data.
◦ used only in analyzing what has occurred in the past.
◦ based on assumed rather than actual results.

Question 2

Starfish Industries' sales budget for the first quarter of the upcoming year shows budgeted sales of $325,000, $350,000, and $310,000 in January, February, and March, respectively. All sales are made on credit. The cash receipts budget for March shows total cash receipts equal to $306,840. Starfish grants a discount to customers who pay within 10 days of the invoice. Starfish collects 60% of sales within the discount period, 20% in the month of sale but outside the discount period, 20% in the month following sale. What is the discount offered by Starfish, and what is the Accounts Receivable balance that will be reported in the March 31 pro-forma balance sheet?
◦ 6%; $62,000
◦ 6%; $73,160
◦ 4%; $70,000
◦ 4%; $73,160

msgero · **Reply #1 on:** Feb 5, 2023

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