Peachtree's Siding and Window Co Peachtree's Siding and Window Co

question 48

Essay

Peachtree's Siding and Window Co. is a custom home improvement company. All sales are made on account: 30 percent of a month's sales are collected in the month of sale, 60 percent are collected in the month following the sale, and 8 percent are collected in the second month following the sale. Cash on hand on October 1 is estimated to be $32,000.
Merchandise purchases and operating expenses are paid as follows: $\begin{array}{l}\text { In the month during which the merchandise is purchased }&80\% \\\text { or the cost is incurred } \\\text { In the subsequent month }&20\%\end{array}$ Peachtree's Siding and Window Co.'s budgeted income statement for each of the next three months is as follows: $\begin{array}{c}\begin{array}{lll}\\\text {Sales}\\\text {Cost of goods sold:}\\\text {Beginning inventory}\\\text {Purchases}\\\text {Goods available}\\\text {Less: End. inventory}\\\text {Cost of goods sold}\\\text {Gross profit}\\\text {Operating expenses}\\\text {Operating income} \end{array}\begin{array}{c}\text { August } \\\$ 140,000 \\ \\\$ 16,400 \\\underline{135,300}\\ \$ 151,700 \\\underline{(28,900)}\\\underline{\$ 122.800} \\ \$ 17,200 \\\underline{(11.400)}\\ \underline{\underline{\$ 5.800}} \end{array}\begin{array}{lll}\text {September}\\\$ 169,000 \\\\ \$ 28,900 \\ \underline{141.500} \\\$ 170,400 \\ \underline{(25,600) } \\ \underline{\$ 144,800} \\ \$ 24,200 \\ \underline{ (15,100) } \\ \underline{ \underline{\$ 9,100}} \end{array}\begin{array}{lll}\text { October } \\\$ 181,000 \\\\\$ 25,600 \\ \underline{\$ 149,700}\\\$ 175,30 \\ \underline{(21,200)}\\\$ 154,100 \\\$ \$ 26,900 \\ \underline{(14,300)}\\ \underline{ \underline{\$ 12,600}} \end{array}\end{array}$
Prepare a cash budget for the month of October.

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Definitions:

Obsessive-Compulsive Personality Disorder

A pattern of preoccupation with orderliness, perfectionism, and control, at the expense of flexibility, openness, and efficiency.

Psychodynamic

Pertains to the psychological forces or processes that influence the human personality and emotional states, based on early life experiences.

Early Childhood Fixation

A concept in psychoanalytic theory referring to an individual's persistent focus on an earlier stage of psychosexual development, potentially leading to personality and emotional disorders.

Avoidant Personality Disorder

A mental health disorder characterized by a long-standing pattern of extreme sensitivity to rejection, social inhibition, and a feeling of inadequacy.