Cash budget-Basie Grenoble Enterprises had sales of $49.800 in March and $60,000 in April Forecast sales for May, June, and July are $70,100, $79,000, and $99,700, respectively. The firm has a cash balance of $5,000 on May 1 and wishes to maintain a minimum cash balance of $5,000. Given the following data, prepare and interpret a cash budget for the months of May, June, and July (1) The firm makes 21% of sales for cash, 64% are collected in the next month, and the remaining 15% are collected in the second month following sale. (2) The firm receives other income of $1,800 per month. (3) The firm's actual or expected purchases, all made for cash, are $50,400, $69,900, and $79,700 for the months of May through July, respectively. (4) Rent is $2,600 per month (5) Wages and salaries are 10% of the previous month's sales. (6) Cash dividends of $2,600 will be paid in June. (7) Payment of principal and interest of $4,000 is due in June. (8) A cash purchase of equipment costing $6,400 is scheduled in July (9) Taxes of $6,200 are due in June. Complete the first month of the cash budget for Grenoble Enterprises below: (Round to the nearest dollar. Please input all the values in the table before checking your answers.) April May Sales Cash sales Lag 1 month Lag 2 months Other income Total cash receipts S March 49,800 $ 10,458 60,000 $ 12.000 CTED $ $ S S 70,100
Cash budget-Basie Grenoble Enterprises had sales of $49.800 in March and $60,000 in April Forecast sales for May, June, and July are $70,100, $79,000, and $99,700, respectively. The firm has a cash balance of $5,000 on May 1 and wishes to maintain a minimum cash balance of $5,000. Given the following data, prepare and interpret a cash budget for the months of May, June, and July (1) The firm makes 21% of sales for cash, 64% are collected in the next month, and the remaining 15% are collected in the second month following sale. (2) The firm receives other income of $1,800 per month. (3) The firm's actual or expected purchases, all made for cash, are $50,400, $69,900, and $79,700 for the months of May through July, respectively. (4) Rent is $2,600 per month (5) Wages and salaries are 10% of the previous month's sales. (6) Cash dividends of $2,600 will be paid in June. (7) Payment of principal and interest of $4,000 is due in June. (8) A cash purchase of equipment costing $6,400 is scheduled in July (9) Taxes of $6,200 are due in June. Complete the first month of the cash budget for Grenoble Enterprises below: (Round to the nearest dollar. Please input all the values in the table before checking your answers.) April May Sales Cash sales Lag 1 month Lag 2 months Other income Total cash receipts S March 49,800 $ 10,458 60,000 $ 12.000 CTED $ $ S S 70,100
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Question
Transcribed Image Text:Cash budget-Basie Grenoble Enterprises had sales of $49.800 in March and $60,000 in April. Forecast sales for May, June, and July are $70,100, $79,000, and $99,700, respectively. The firm
has a cash balance of $5,000 on May 1 and wishes to maintain a minimum cash balance of $5,000 Given the following data, prepare and interpret a cash budget for the months of May, June, and
July.
(1) The firm makes 21% of sales for cash, 64% are collected in the next month, and the remaining 15% are collected in the second month following sale.
(2) The firm receives other income of $1,800 per month.
(3) The firm's actual or expected purchases, all made for cash, are $50,400, $69,900, and $79,700 for the months of May through July, respectively.
Rent is $2,600 per
(5) Wages and salaries are 10% of the previous month's sales.
(6) Cash dividends of $2,000 will be paid in June..
(7) Payment of principal and interest of $4,000 is due in June.
(8) A cash purchase of equipment costing $6,400 is scheduled in July
(9) Taxes of $6,200 are due in June.
Complete the first month of the cash budget for Grenoble Enterprises below. (Round to the nearest dollar. Please input all the values in the table before checking your answers.)
April
May
Sales
Cash sales
Lag 1 month
Lag 2 months
Other income
Total cash receipts
S
March
49,800 $
10,458
CTED
60,000 $
12.000 S
S
$
S
S
70,100
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