Problem 7-16A (30 minutes) 1. September cash $ 7,400 September collections on account: July $20,000 × 18% 3,600 August sales: $30,000 × 70% 21,000 September sales: $40,000 × 10% 4,000 Total cash collections $36,000 2. Payments to suppliers: August purchases (accounts payable) $16,000 September purchases: $25,000 × 20% 5,000 Total cash payments $21,000 3. Calgon Products Cash Budget For the Month of September Cash balance, September 1 $ 9,000 Add cash receipts: Collections from customers 36,000 Total cash available before current financing 45,000 Less disbursements: Payments to suppliers for inventory $21,000 Selling and administrative expenses 9,000 * Equipment purchases 18,000 Dividends paid 3,000 Total disbursements 51,000 Excess (deficiency) of cash available over disbursements (6,000) Financing: Borrowings 11,000 Repayments 0 Interest 0 Total financing 11,000 Cash balance, September 30 $ 5,000 *$13,000 $4,000 = $9,000. –
Problem 7-16A (30 minutes) 1. September cash $ 7,400 September collections on account: July $20,000 × 18% 3,600 August sales: $30,000 × 70% 21,000 September sales: $40,000 × 10% 4,000 Total cash collections $36,000 2. Payments to suppliers: August purchases (accounts payable) $16,000 September purchases: $25,000 × 20% 5,000 Total cash payments $21,000 3. Calgon Products Cash Budget For the Month of September Cash balance, September 1 $ 9,000 Add cash receipts: Collections from customers 36,000 Total cash available before current financing 45,000 Less disbursements: Payments to suppliers for inventory $21,000 Selling and administrative expenses 9,000 * Equipment purchases 18,000 Dividends paid 3,000 Total disbursements 51,000 Excess (deficiency) of cash available over disbursements (6,000) Financing: Borrowings 11,000 Repayments 0 Interest 0 Total financing 11,000 Cash balance, September 30 $ 5,000 *$13,000 – $4,000 = $9,000.
Ch07solutions.docx