Answer both the subparts A and B.if answered within 30mins,it would be great!! The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following: A: Cash balance on June 1 is $739 B: Actual sales for April and May are as follows: April May Cash Sales $10,000 $18,000 Credit Sales $28,900 $35,000 Total Sales $38,900 $53,000 C: Credit sales are collected over a three-month period: 40% in the month of sale, 30% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. D: Inventory purchases average 64% of a months total sales. Of those purchases 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month. E: Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner. F: Rent is $4,100 per month. G: Taxes to be paid in June are $6,780. The owner also tells you that he expects cash sales of %18,600 and credit sales of $54,000 for June. No minimum cash balance is required. The owner of the company doesn’t have access to short term loans. 1: Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. 2: Did the business show a negative cash balance for June? Suppose that the owner has no hope of establishing a line of credit for the business, what recommendations would you give the owner for dealing with a negative cash balance?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Answer both the subparts A and B.if answered within 30mins,it would be great!!
The owner of a building supply company has requested a
A: Cash balance on June 1 is $739
B: Actual sales for April and May are as follows:
April May
Cash Sales $10,000 $18,000
Credit Sales $28,900 $35,000
Total Sales $38,900 $53,000
C: Credit sales are collected over a three-month period: 40% in the month of sale, 30% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible.
D: Inventory purchases average 64% of a months total sales. Of those purchases 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month.
E: Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner.
F: Rent is $4,100 per month.
G: Taxes to be paid in June are $6,780.
The owner also tells you that he expects cash sales of %18,600 and credit sales of $54,000 for June. No minimum cash balance is required. The owner of the company doesn’t have access to short term loans.
1: Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments.
2: Did the business show a negative cash balance for June? Suppose that the owner has no hope of establishing a line of credit for the business, what recommendations would you give the owner for dealing with a negative cash balance?
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