1. (Cash Collections) Snobby Crab Shackbudgeted credit sales in the first quarter of 2009 to be asfollows:
January $150,000
February $160,000
March $172,000
All sales are on account. Credit sales in October 2008 were$40,000, November 2008 were $50,000 and December 208 were $170,000.The company expects to collect 65% of a monthâs sales in the monthof sale, 25% in the first month following month of sale and 5% inthe second month following the month of sale.
Estimate cash receipts for each month of the first quarterof 2009. What is the amount of accounts receivable at March 31,2009? (Any accounts over 60 days are uncollectable and writtenoff).
2. (Cash Disbursements) Snobby CrabShack expects to make purchases in the first quarter of 2009 asfollows:
January $84,000
February $96,000
March $78,000
Purchases in December in 2008 are expected to be $87,000. Thecompany expects that 55% of a monthâs purchases will be paid in themonth of purchase and 45% will be paid in the following month.Other cash operating expenses per month are $60,000. In addition,the company has $8,000 of depreciation per month.
Estimate cash disbursements related to purchases for eachmonth of the first quarter of 2009. What are the accounts payablerelated to purchases at March 31, 2009?
3. (Cash Budget) Snobby Crab Shackhas a cash balance at December 31, 2008 of $4,050 and wants tomaintain an ending cash balance of $2,000 per month, what isthe cash balance at the end of January, February and March 2009(assume any loans are non-interest bearing).
1. (Cash Collections) Snobby Crab Shackbudgeted credit sales in the first quarter of 2009 to be asfollows:
January $150,000
February $160,000
March $172,000
All sales are on account. Credit sales in October 2008 were$40,000, November 2008 were $50,000 and December 208 were $170,000.The company expects to collect 65% of a monthâs sales in the monthof sale, 25% in the first month following month of sale and 5% inthe second month following the month of sale.
Estimate cash receipts for each month of the first quarterof 2009. What is the amount of accounts receivable at March 31,2009? (Any accounts over 60 days are uncollectable and writtenoff).
2. (Cash Disbursements) Snobby CrabShack expects to make purchases in the first quarter of 2009 asfollows:
January $84,000
February $96,000
March $78,000
Purchases in December in 2008 are expected to be $87,000. Thecompany expects that 55% of a monthâs purchases will be paid in themonth of purchase and 45% will be paid in the following month.Other cash operating expenses per month are $60,000. In addition,the company has $8,000 of depreciation per month.
Estimate cash disbursements related to purchases for eachmonth of the first quarter of 2009. What are the accounts payablerelated to purchases at March 31, 2009?
3. (Cash Budget) Snobby Crab Shackhas a cash balance at December 31, 2008 of $4,050 and wants tomaintain an ending cash balance of $2,000 per month, what isthe cash balance at the end of January, February and March 2009(assume any loans are non-interest bearing).
