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Blue Spruce, Inc. has budgeted sales revenues as follows: Credit sales Cash sales Total sales June June July August $140,000 91,000 197,000 $238,000 $376,000 $ 288,000 98,000 July $125,000 251,000 $ Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted inventory purchases are as follows: $300,000 228,000 106,000 August Other cash disbursements budgeted: (a) selling and administrative expenses of $47,000 each month, (b) dividends of $110,000 will be paid in July, and (c) purchase of equipment in August for $37,000 cash. The company's policy is to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money in this case is for one month.

Blue Spruce, Inc. has budgeted sales revenues as follows: Credit sales Cash sales Total sales June June July August $140,000 91,000 197,000 $238,000 $376,000 $ 288,000 98,000 July $125,000 251,000 $ Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted inventory purchases are as follows: $300,000 228,000 106,000 August Other cash disbursements budgeted: (a) selling and administrative expenses of $47,000 each month, (b) dividends of $110,000 will be paid in July, and (c) purchase of equipment in August for $37,000 cash. The company's policy is to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money in this case is for one month.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Prepare a cash budget for the months of July and August. (Do not leave any answer field blank. Enter O for amounts.) Repayments Total Available Cash Cash Sales Ending Cash Balance Collections from Customers Receipts Total Receipts Borrowings Beginning Cash Balance Financing Save for Later v BLUE SPRUCE, INC. Cash Budget For the Two Months of July and August $ $ July August Attempts: 0 of 1 used Submit Answer
Transcribed Image Text:Prepare a cash budget for the months of July and August. (Do not leave any answer field blank. Enter O for amounts.) Repayments Total Available Cash Cash Sales Ending Cash Balance Collections from Customers Receipts Total Receipts Borrowings Beginning Cash Balance Financing Save for Later v BLUE SPRUCE, INC. Cash Budget For the Two Months of July and August $ $ July August Attempts: 0 of 1 used Submit Answer
Blue Spruce, Inc. has budgeted sales revenues as follows: Credit sales Cash sales Total sales June July June July $140,000 $125,000 98,000 251,000 $238,000 $376,000 $ 288,000 August Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted inventory purchases are as follows: August $ 91,000 $300,000 228,000 106,000 197,000 Other cash disbursements budgeted: (a) selling and administrative expenses of $47,000 each month, (b) dividends of $110,000 will be paid in July, and (c) purchase of equipment in August for $37,000 cash. The company's policy is to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money in this case is for one month.
Transcribed Image Text:Blue Spruce, Inc. has budgeted sales revenues as follows: Credit sales Cash sales Total sales June July June July $140,000 $125,000 98,000 251,000 $238,000 $376,000 $ 288,000 August Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted inventory purchases are as follows: August $ 91,000 $300,000 228,000 106,000 197,000 Other cash disbursements budgeted: (a) selling and administrative expenses of $47,000 each month, (b) dividends of $110,000 will be paid in July, and (c) purchase of equipment in August for $37,000 cash. The company's policy is to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money in this case is for one month.
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