A company has forecast sales in the first 3 months of the year as follows (figures in millions): January, $80; February, $60; March, $40. 70% of sales are usually paid for in the month that they take place, 20% in the following month, and the final 10% in the next 2 month. Receivables at the end of December were $23 million. What are the forecasted collections on accounts receivable in March?

2. A Sendai clothing wholesaler was preparing its sales budgetfor the first quarter of 20X8. Forecast sales are as follows (Allvalues are in thousands of yen).

a) Sales are 40% cash and 60% on credit. Fifty-five percent ofthe credit accounts are collected in the month of sale, 35% in themonth following the sale, and 10% in the following month. Nouncollectible accounts are anticipated. Accounts receivable at thebeginning of 20X8 are ¥82,950 (10% of November credit sales of¥150,000 and 45% of December credit sales of ¥151,000).

b) Prepare a schedule showing sales and cash collections forJanuary, February, and March, 20X8.

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 month’s 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 month’s 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 month’s 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 month’s 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).