Cool-Ice’s balance sheet for 30 November follows. Use it and the…
Question Answered step-by-step Cool-Ice’s balance sheet for 30 November follows. Use it and the… Cool-Ice’s balance sheet for 30 November follows. Use it and the following information to prepare a cash budget for Cool-Ice for December.80% of sales are on account, of which half are collected in the month of the sale, 49% are collected the following month and 1% are never collected and are written off as bad debts.All purchases of materials are on account. Cool-Ice pays for 70% of purchases in the month of purchase and 30% in the following month.All other costs are paid in the month incurred.Cool-Ice is making monthly interest payments of 1% (12% per year) on a $20 000 long-term loan.Cool-Ice plans to pay the $500 of taxes owed as of 30 November in the month of December. Income tax expense for December is zero.40% of processing and set-up costs, and 30% of marketing and general administration costs, are depreciation. Cool-Ice Balance sheet as of 30 November Assets Cash $587 Accounts receivable$4 800 Less: Allowance for bad debts964 704 Inventories Direct materials 169 Finished goods 974 Fixed assets$190 000 Less: Accumulated depreciation55 759134 241 Total assets $140 675 Liabilities and equity Accounts payable $696 Taxes payable 500 Interest payable 200 Long-term debt 20 000 Ordinary shares 10 000 Retained earnings 109 279 Total liabilities and equity $140 675 budgeted income statement for December and a budgeted balance sheet for Cool-Ice as of 31 December. Accounting Business Financial Accounting AF 102 Share QuestionEmailCopy link Comments (0)
