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Kailua and Company is a legal services firm. All sales of legal services are billed to the client (there are no cash sales). Kailua expects that, on average, 20% will be paid in the month of billing, 50% will be paid in the month following billing, and 25% will be paid in the second month following billing. For the next 5 months, the following sales billings are expected: May $84,000 June 100,800 July 77,000 August 87,100 September 90,000.

Required:

Prepare a schedule showing the cash expected in payments on accounts receivable in August and in September. If an amount box does not require an entry, leave it blank or enter "0". Be sure to enter percentages as whole numbers.

Kailua and Company Schedule
        August   September
June:            
$ ×  %       $   $
July:            
$ ×  %            
$ ×  %            
August:            
$ ×  %            
$ ×  %            
September:            
$ ×  %            
Total cash receipts       $  

    $

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Irving HeathcoteLv2
23 Mar 2020
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Preparing a Schedule of Cash Collections on Accounts ReceivableKailua and Company is a legal services firm. All sales of legalservices are billed to the client (there are no cash sales). Kailuaexpects that, on average, 20% will be paid in the month of billing,50% will be paid in the month following billing, and 25% will bepaid in the second month following billing. For the next 5 months,the following sales billings are expected: May $84,000 June 100,800July 77,000 August 87,000 September 90,000 Required: Prepare aschedule showing the cash expected in payments on accountsreceivable in August and in September. If an amount box does notrequire an entry, leave it blank or enter "0". Be sure to enterpercentages as whole numbers. Kailua and Company Schedule AugustSeptember June: $ × % $ $ July: $ × % $ × % August: $ × % $ × %September: $ × % Total cash receipts $ $

Calgon Products, a distributor of organic beverages, needs acash budget for September. The following information is available:a. The cash balance at the beginning of September is $11,200. b.Actual sales for July and August and expected sales for Septemberare as follows: July August September Cash sales $ 5,300 $ 4,700 $7,200 Sales on account 22,000 29,000 45,000 Total sales $ 27,300 $33,700 $ 52,200 Sales on account are collected over a three-monthperiod as follows: 5% collected in the month of sale, 65% collectedin the month following sale, and 28% collected in the second monthfollowing sale. The remaining 2% is uncollectible. c. Purchases ofinventory will total $30,000 for September. Thirty percent of amonth's inventory purchases are paid for during the month ofpurchase. The accounts payable remaining from August's inventorypurchases total $17,000, all of which will be paid in September. d.Selling and administrative expenses are budgeted at $15,000 forSeptember. Of this amount, $3,000 is for depreciation. e. Equipmentcosting $18,000 will be purchased for cash during September, anddividends totaling $3,000 will be paid during the month. f. Thecompany maintains a minimum cash balance of $7,200. An open line ofcredit is available from the company's bank to bolster the cashbalance as needed. Required: 1. Prepare a schedule of expected cashcollections for September. (Do not round intermediate calculations.Omit the "$" sign in your response.) Schedule of Expected CashCollections September cash sales $ September collections onaccount: July sales August sales September sales Total cashcollections $ 2. Prepare a schedule of expected cash disbursementsfor inventory purchases for September. (Do not round intermediatecalculations. Omit the "$" sign in your response.) Schedule ofExpected Cash Disbursements Payments to suppliers: August purchases$ September purchases Total cash payments $ 3. Prepare a cashbudget for September. Indicate in the financing section anyborrowing that will be needed during September. Assume that anyinterest will not be paid until the following month. (Input allamounts as positive values except cash deficiency, repayments andinterest which should be indicated by a minus sign. Do not roundintermediate calculations. Leave no cells blank - be certain toenter "0" wherever required. Omit the "$" sign in your response.)Calgon Products Cash Budget For the Month of September Cashbalance, beginning $ Add cash receipts: Collections from customersTotal cash available before current financing Less disbursements:Payments to suppliers for inventory $ Selling and administrativeexpenses Equipment purchases Dividends paid Total disbursementsExcess (deficiency) of cash available over disbursements Financing:Borrowings Repayments Interest Total financing Cash balance, ending$

Herbal Care Corp., a distributor of herb-based sunscreens, is readyto begin its third quarter, in which peak sales occur. The companyhas requested a $93,300, 90-day loan from its bank to help meetcash requirements during the quarter. Because Herbal Care hasexperienced difficulty in paying off its loans in the past, theloan officer at the bank has asked the company to prepare a cashbudget for the quarter. In response to this request, the followingdata have been assembled:

a. On July 1, the beginning of the third quarter, the company willhave a cash balance of $39,000.
b.

Actual sales for the last two months and budgeted sales for thethird quarter follow (all sales are on account):

May (actual) $230,000
June (actual) $270,000
July (budgeted) $450,000
August (budgeted) $760,000
September (budgeted) $320,000

Past experience shows that 25% of a month%u2019s sales arecollected in the month of sale, 69% in the month following sale,and 1% in the second month following sale. The remainder isuncollectible.

c. Budgeted merchandise purchases and budgeted expenses for the thirdquarter are given below:

July August September
Merchandise purchases $230,000 $346,000 $169,000
Salaries and wages $49,000 $32,000 $26,000
Advertising $143,000 $131,000 $62,000
Rent payments $8,600 $7,200 $7,800
Depreciation $8,800 $9,700 $8,500

Merchandise purchases are paid in full during the month followingpurchase. Accounts payable for merchandise purchases on June 30,which will be paid during July, total $213,000.

d. Equipment costing $8,800 will be purchased for cash duringJuly.
e.

In preparing the cash budget, assume that the $93,300 loan will bemade in July and repaid in September. Interest on the loan willtotal $1,060.
Requirement 1:

Prepare a schedule of expected cash collections for July, August,and September and for the quarter in total. (Leave no cells blank - be certain to enter "0" wherever required.Omit the "$" sign in your response)


Month
July August September Quarter
From accounts receivable:
May sales $ $ $ $
June sales
From budgeted sales:
July sales
August sales
September sales
Total cash collections

$

$

$

$


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