Case 10.59 Sports Fanatic Company is a retail sporting goods store that uses accrual accounting...
70.2K
Verified Solution
Link Copied!
Question
Accounting
Case 10.59 Sports Fanatic Company is a retail sporting goods store that uses accrual accounting for its records. Information on Sports Fanatic's operations is as follows: 1. 2. 3. 4. The store has budgeted sales at $220,000 for January and $200,000 for February. It expects collections to be 60% in the month of sale and 38% in the month following the sale. It expects 2% of sales to be uncollectible. Gross margin is 25% of sales. It purchases a total of 80% of the merchandise for resale in the month before the month of sale and 20% in the month of sale. It makes payments for merchandise in the month after it purchases it. Other expected monthly expenses to be paid in cash amount to $22,600. Annual depreciation is $216,000. Sports Fanatic's balance sheet at the close of business on December 31 follows. 5. 7. SPORTS FANATIC COMPANY Cash Budget For the Month of January Beginning Cash Balance 22000 Add : Cash Receipts Collections from January 132000 Accounts Receivable-from December 76000 Total Cash Receipts 230000 Total Disbursements Ending Cash Balance
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
