75 Slabs International is in the building construction business. In 2019, it is expected that 40 percent of a month's sales will be collected in cash, with the balance being collected the lowing month. Of the purchases, 50 percent are paid the following month, 30 percent are pałd two months, and the remaining 20 percent are paid during the month of purchase. The sales rce receives P2,000 a month base pay plus a 2 percent commission. Labor expenses are pected to be P4,000 a month. Other operating expenses are expected to run about P2,000 a nth, including P500 for depreciation. The ending cash balance for 2018 was P4,500. Sales Purchases lio 2018 Actual November December P80,000 90,000 P70,000 80,000 allo 2019 Budgeted January February March 70,000 90,000 70,000 60,000 b rie 50,000 30,000 ructions: 1 Prepare a cash budget and determine the projected ending cash balances for the first three months of 2019. 2 Determine the months that the company would either borrow or invest cash.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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75
Slabs International is in the building construction business. In 2019, it is expected that 40
percent of a month's sales will be collected in cash, with the balance being collected the
lowing month. Of the purchases, 50 percent are paid the following month, 30 percent are patd
two months, and the remaining 20 percent are paid during the month of purchase. The sales
rce receives P2,000 a month base pay plus a 2 percent commission. Labor expenses are
pected to be P4,000 a month. Other operating expenses are expected to run about P2,000 a
onth, including P500 for depreciation. The ending cash balance for 2018 was P4,500.
alse lo rinon Sales
dino
Purchases
belio
02018 Actual
P80,000
November
December om
2019 Budgeted
January
February
March
P70,000
Hino beoc 90,000
inuo 80,000
allon vs
eslse leloT
70,000
60,000 oeib rias
50,000
70,000
90,000
30,000
ructions:
1 Prepare a cash budget and determine the projected ending cash balances for the first three
months of 2019.
2 Determine the months that the company would either borrow or invest cash.
Transcribed Image Text:75 Slabs International is in the building construction business. In 2019, it is expected that 40 percent of a month's sales will be collected in cash, with the balance being collected the lowing month. Of the purchases, 50 percent are paid the following month, 30 percent are patd two months, and the remaining 20 percent are paid during the month of purchase. The sales rce receives P2,000 a month base pay plus a 2 percent commission. Labor expenses are pected to be P4,000 a month. Other operating expenses are expected to run about P2,000 a onth, including P500 for depreciation. The ending cash balance for 2018 was P4,500. alse lo rinon Sales dino Purchases belio 02018 Actual P80,000 November December om 2019 Budgeted January February March P70,000 Hino beoc 90,000 inuo 80,000 allon vs eslse leloT 70,000 60,000 oeib rias 50,000 70,000 90,000 30,000 ructions: 1 Prepare a cash budget and determine the projected ending cash balances for the first three months of 2019. 2 Determine the months that the company would either borrow or invest cash.
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