Problem: The following information pertains to the January operating budget for Casey Corp -
Budgeted sales for January $100,000 and February $200,000
Collections for sales are 60% in the month of sale and 40% the next month
Gross margin in 30% of sales
Administrative costs are $10,000 each month
Beginning accounts receivable $20,000
Beginning inventory $14,000
Beginning accounts payable $60,000 (all from inventory purchases)
Purchases are paid in full the following month
Desired ending inventory is 20% of next month's cost of goods sold (COGS)
1) For January, budgeted cash collections are _________.
$20,000, $60,000, $80,000, or cannot be determined - please advise answer & why?
2) At the end of January, budgeted accounts receivable is _______.
$20,000, $40,000, $60,000, or cannot be determined - please advise answer & why?
3) For January, budgeted cost of goods sold is _______
$20,000, $30,000, $40,000, or cannont be determined - please advise answer & why?