Requirement 1. Prepare Sosa Company’s schedule of cash receipts from customers and schedule of cash payments for the first quarter of 2016. Begin by preparing the schedule of cash receipts from customers for the first quarter of 2016. Cash Receipts from Customers First Quarter 2016 Total sales Cash Receipts from Customers: Accounts Receivable balance, December 31, 2015 1st Qtr.â€”Sales Total cash receipts from customers Accounts Receivable balance, March 31, 2016: 1st Qtr.â€”Sales, collected in 2nd Qtr. Prepare the schedule of cash payments for the first quarter of 2016. Cash Payments First Quarter 2016 Total direct materials purchases Cash Payments Direct Materials: Accounts Payable balance, December 31, 2015 1st Qtr.â€”Direct material purchases Total payments for direct materials Direct Labor: Total payments for direct labor Manufacturing Overhead: Total payments for manufacturing overhead Selling and Administrative Expenses: Total payments for Selling and Admin. expenses Income Taxes: Total payments for income taxes Capital Expenditures: Total payments for capital expenditures Total cash payments Accounts Payable balance, March 31, 2016 1st Qtr.â€”Direct materials purchases, paid in 2nd Qtr. Requirement 2. Prepare Sosa Company’s cash budget for the first quarter of 2016. Review the schedule of cash receipts from customers you prepared in Requirement 1. Review the schedule of cash payments you prepared in Requirement 1. . Sosa Company Cash Budget For the Quarter Ended March 31, 2016 Beginning cash balance Cash receipts Cash available Cash payments: Purchases of direct materials Direct labor Manufacturing overhead Selling and administrative expenses Income taxes Capital expenditures Total cash payments Ending cash balance a. Capital expenditures include $36,000 for new manufacturing equipment to be purchased and paid in the first quarter. b. Cash receipts are 60% of sales in the quarter of the sale and 40% in the quarter following the sale. c. Direct materials purchases are paid 70% in the quarter purchased and 30% in the next quarter. d. Directlabor, manufacturingoverhead, and selling and administrative costs are paid in the quarter incurred. e. Income tax expense for the first quarter is projected at $42,000 and is paid in the quarter incurred. f. SosaCompany expects to have adequate cash funds and does not anticipate borrowing in the first quarter. g. The December 31,2015, balance in Cash is $14,000, in Accounts Receivable is $23,200, and in Accounts Payable is $10,500 Total sales $297,500 Budgeted purchases of direct materials 39,450 Budgeted direct labor cost 38,880 Budgeted manufacturing overhead costs: Variable manufacturing overhead 3,645 Depreciation 600 Insurance and property taxes 9,120 Budgeted selling and administrative expenses: Salaries expense 5,000 Rent expense 3,000 Insurance expense 1,200 Depreciation expense 100 Supplies expense 2,975
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