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G H M N P 1Problem 2 HCI Corporation is completing their cash budget for the following year., HOI Corporation is a manufacturer of metal picture frames. The firm's two product lines are designated as 5 (small frames; 5 x 7 inches) and L (large frames; 8 x 10 inches). Here is the provided budget information: 3 Sales figres 20X1 20X0 1. Sales in the fourth quarter of 20w0 are expected to be 50,000 5 frames and 40,000 L frames. Over the next year, sales in each product Iine will grow by 5,000 units each quarter over the previous quarter. For example, S frame sales in the first quarter of 20x1 are expected to be 55,000 units. Q4 Q1 55,000 6 S frame unit sales 7 S sales price a L fame unit sales L sales price 50,000 10 S 10 40,000 45,000 2. HCrs sales history indicates that 60 percent of all sales are on credit, with the remainder of the sales in cash The company's collection experience shows that s0 percent of the credit sales are collected during the quarter in which the sale is made, while the remaining 20 percent is collected in the following quarter. (For simpicity, assume the company is able to collect 100 percent of its accounts receivable) 15 $ 15 40% Percent of sales made for cash in the qaarter of sale 60% Percest of sales made on credit 10 11 12 Collections a The s frame sells for $10, and the L frame sels for $15. These prices are expected to hold constant throughout 201. 13 80% of curent quarter's credt sales 20% of previous quarter's credit sales 14 15 4 Total manufacturing cost per unit is $7 for the s frame and $10 for the L frame. All manufacturing cost purchases are made on account, and 80 percent of each quarter's purchases are paid in cash during the same quarter as the purchase. The other 20 percent is paid in the next quarter. Units sold equal units purchased. 16 17 Parchases 20X0 20X1 Q4 5. Selling and administrative expenses, all paid in cash, are $100,000 per quarter 19 20 S me unit pachases 21 S mandachring cost per unit 22 L fame unit prchases 23 L madactwing cost per un 50,000 $7 55.000 6. Dividend payments are $50,000 per quarter $7 40,000 $10 45,000 $10 7. The begnning cash balance for Q1 of 20x1 is S95,000 Prepare the following for each of the four quarters of 20x1: 24 25 80% of curent quater's parchases paid in the carrent quarter 20% of previous quarter's purchases paid in the curent quater 1. Sales budget 2. Cash receipts budget 3. Cash disbursements budget 26 27 28 Oben expeses 29 Selling and admin expenses 30 Payment of dvidends $ 100,000 pr quater 50.000 pr quate 31 12 Prepare the folowing 33 1 Sales badget 34 2 Cash receipts badget 3 Cash disbrsements bodget 4 Summary cash budget 15 36 37 39 Instructions Colections problem Cash budget problem Read e G H M N P 1Problem 2 HCI Corporation is completing their cash budget for the following year., HOI Corporation is a manufacturer of metal picture frames. The firm's two product lines are designated as 5 (small frames; 5 x 7 inches) and L (large frames; 8 x 10 inches). Here is the provided budget information: 3 Sales figres 20X1 20X0 1. Sales in the fourth quarter of 20w0 are expected to be 50,000 5 frames and 40,000 L frames. Over the next year, sales in each product Iine will grow by 5,000 units each quarter over the previous quarter. For example, S frame sales in the first quarter of 20x1 are expected to be 55,000 units. Q4 Q1 55,000 6 S frame unit sales 7 S sales price a L fame unit sales L sales price 50,000 10 S 10 40,000 45,000 2. HCrs sales history indicates that 60 percent of all sales are on credit, with the remainder of the sales in cash The company's collection experience shows that s0 percent of the credit sales are collected during the quarter in which the sale is made, while the remaining 20 percent is collected in the following quarter. (For simpicity, assume the company is able to collect 100 percent of its accounts receivable) 15 $ 15 40% Percent of sales made for cash in the qaarter of sale 60% Percest of sales made on credit 10 11 12 Collections a The s frame sells for $10, and the L frame sels for $15. These prices are expected to hold constant throughout 201. 13 80% of curent quarter's credt sales 20% of previous quarter's credit sales 14 15 4 Total manufacturing cost per unit is $7 for the s frame and $10 for the L frame. All manufacturing cost purchases are made on account, and 80 percent of each quarter's purchases are paid in cash during the same quarter as the purchase. The other 20 percent is paid in the next quarter. Units sold equal units purchased. 16 17 Parchases 20X0 20X1 Q4 5. Selling and administrative expenses, all paid in cash, are $100,000 per quarter 19 20 S me unit pachases 21 S mandachring cost per unit 22 L fame unit prchases 23 L madactwing cost per un 50,000 $7 55.000 6. Dividend payments are $50,000 per quarter $7 40,000 $10 45,000 $10 7. The begnning cash balance for Q1 of 20x1 is S95,000 Prepare the following for each of the four quarters of 20x1: 24 25 80% of curent quater's parchases paid in the carrent quarter 20% of previous quarter's purchases paid in the curent quater 1. Sales budget 2. Cash receipts budget 3. Cash disbursements budget 26 27 28 Oben expeses 29 Selling and admin expenses 30 Payment of dvidends $ 100,000 pr quater 50.000 pr quate 31 12 Prepare the folowing 33 1 Sales badget 34 2 Cash receipts badget 3 Cash disbrsements bodget 4 Summary cash budget 15 36 37 39 Instructions Colections problem Cash budget problem Read e

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