James,Incmakes a Product That Has Peak Sales in September of Each

question 71

Essay

James,Inc.makes a product that has peak sales in September of each year.The company has prepared a sales budget for the third quarter as shown below:

$$\begin{array} { | l | r | } \hline & \text { Budgeted Sales } \\\hline \text { July } & \$ 200,000 \\\hline \text { August } & 400,000 \\\hline \text { September } & 600,000 \\\hline\end{array}$$
The company is in the process of preparing a cash budget for the third quarter and must determine the expected cash collections by month.To this end,the following information has been assembled: $$\begin{array} { | l | r | } \hline & \text { Colections on Sales } \\\hline \text { In month of sale } & 60 \% \\\hline \text { In month tollowing sale } & 25 \% \\\hline \text { In second month following } \\\text { sale } & 15 \% \\\hline\end{array}$$
The company gives a 3% cash discount to customers paying in the month of their sale.The company charges 2% interest to customers who pay in the second month following their sales.The accounts receivable balance to start the quarter is $150,000: $35,000 from May's sales and $115,000 from June's sales.Required:
Prepare a cash receipts budget for the third quarter.

Evaluate market outcomes based on changes in consumer preferences and income.

Assess the implications of government actions on market prices and equilibrium.

Understand the effect of cost changes on supply and market equilibrium.

Explain the role of external factors such as natural disasters on markets.

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Definitions:

Miscegenation

A dated term referring to the interbreeding of people considered to be of different racial types, often used in contexts discussing racial purity and anti-interracial union laws.

Racial Categories

Classification systems that divide humans into groups based on physical and genetic traits, which are socially constructed and have significant implications for social identity and hierarchy.

Colonization

The act of establishing control over indigenous peoples and their lands by foreign powers or states, often involving settlement and exploitation.

Foreign Power

Typically refers to a country or an entity that has influence, control, or authority outside of its own borders.