accounting-Aragon and Associates has found from past experience that 25%

1. Cash Budget

Aragon and Associates has found from past experience that 25% of
its services are for cash. The remaining 75% are on credit. An aging schedule
for accounts receivable reveals the following pattern:

a.
Ten percent of fees on credit are paid in the month that service
is rendered.

b.
Sixty percent of fees on credit are paid in the month following
service.

c.
Twenty-six percent of fees on credit are paid in the second
month following service.

d.
Four percent of fees on credit are never collected.

Fees (on credit) that have not been paid until the second month
following performance of the legal service are considered overdue and are
subject to a 3% late charge.

Aragon has developed the following forecast of fees:

May	$180,000
June	200,000
July	190,000
August	194,000
September	240,000

Required:

Prepare a schedule
of cash receipts for August and September. If an amount box does not require an
entry, leave it blank or enter “0”. Round answers to the nearest
dollar.

Aragon and Associates
Schedule of Cash Receipts
For August and September
	August	September
Cash fees	$	$
Received from sales in:
June
July
August
September
Total	$	$

Check My Work

Preparing a Production Budget

Patrick Inc. makes industrial solvents. In the
first four months of the coming year, Patrick expects the following unit sales:

January	41,000
February	38,000
March	50,000
April	51,000

Patrick’s policy is to have 20% of next
month’s sales in ending inventory. On January 1, it is expected that there will
be 4,400 drums of solvent on hand.

Required: Prepare
a production budget for the first quarter of the year. Show the number of drums
that should be produced each month as well as for the quarter in total. If
required, round your answers to the nearest whole unit.

Patrick Inc.
Production Budget
For the Coming Quarter
	January	February	March	1st Quarter Total
Sales
Desired ending inventory
Total needs
Less: Beginning inventory
Units to be produced

Preparing a Budgeted Income Statement

Oliver Company provided the following
information for the coming year:

Units produced and sold	160,000
Cost of goods sold per unit	$6.30
Selling price	$14
Variable selling and administrative expenses per unit	$1.10
Fixed selling and administrative expenses	$423,000
Tax rate	23 %

Required:

Prepare a budgeted income statement for Oliver Company for the
coming year. Round all income statement amounts to the nearest dollar.

Oliver Company
Budgeted Income Statement
For the Coming Year
Sales	$
Cost of goods sold
Gross margin	$
Less: Variable selling and administrative expenses
Less: Fixed selling and administrative expenses
Operating income	$
Less: Income taxes
Net income	$