Scribd
Upload
55 views1 page

Chapter 07 Billings

This document summarizes a business planning and short-term budgeting case study for Polytone Inc., a retailer. It provides details on the company's credit terms for sales and purchases, historical collection rates, sales forecasts, inventory targets, and cash flow requirements to calculate expected cash collections, purchases, payments and borrowing needs for the coming months.

Uploaded by

deusvanfadri0905
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
55 views1 page

Chapter 07 Billings

This document summarizes a business planning and short-term budgeting case study for Polytone Inc., a retailer. It provides details on the company's credit terms for sales and purchases, historical collection rates, sales forecasts, inventory targets, and cash flow requirements to calculate expected cash collections, purchases, payments and borrowing needs for the coming months.

Uploaded by

deusvanfadri0905
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 1

CHAPTER 7

Business Planning and Short-Term Budgetary Systems


The Polytone, Inc. is a retailer whose sales 3. The budgeted peso value of inventory on August
are all made on credit. Sales are billed twice 31 will be
monthly, on the 10th of the month for the last half of
a. P150,000
the prior month's sales and on the 20th of the month
b. P180,000
for the first half of the current month's sales. The
c. P130,000
terms of all sales are 2/10, net 30. Based on past
d. P120,000
experience, the collection experience of accounts
receivable is as follows: 4. How much merchandise should the company
plan to purchase during June?
Within the discount period 80%
On the 30th day 18% a. P650,000
Uncollectible 2% b. P620,000
c. P680,000
The sales value of shipments for May and d. P660,000
the forecast for the next four months are 5. The amount of payments for the month of August
May (actual) P700,000 is:
June 800,000
a. P720,000
July 900,000
August 900,000 b. P780,000
September 600,000 c. P690,000
d. P660,000

The company's average markup on its 6. If the beginning cash balance is P15,000, the
products is 20% of the sales price. It also purchases required ending cash balance is P12,000, cash
merchandise for resale to meet the current month's disbursements are P125,000, and cash collections
sales demand and to maintain a desired monthly from customers are P90,000, the company must:
ending inventory of 25% of the next month's sales. a. borrow P32,000
All purchases are on credit with terms of net 30. The b. borrow P8,000
company pays for one-half of a month's purchases c. borrow P20,000
in the month of purchase and the other half in the d. borrow P38,000
month following the purchase. All sales and
purchases occur uniformly throughout the month.
1. How much cash can the company collect from
accounts receivable during July?
a. P801,400
b. P815,000
c. P842,600
d. P794,000
2. How much cash will be collected in September
from sales made in August?
a. P441,000
b. P433,800
c. P400,400
d. P337,000

You might also like