Cash Budget LeeAnn Ortiz owns a retail store that sells new and used sporting equipment. LeeAnn has requested a cash budget for October. After examining the records of the company, you find the following: Cash balance on October 1 is $1,120. Actual sales for August and September are as follows: August September Cash sales $6,000 $4,500 Credit sales 57,000 61,000 Total sales $63,000 $65,500 Credit sales are collected over a three-month period: 40 percent in the month of sale, 36 percent in the next month, and 22 percent in the second month after the sale. The remaining sales are uncollectible. Inventory purchases average 70 percent of a month's total sales. Of those purchases, 45 percent are paid for in the month of purchase. The remaining 55 percent are paid for in the following month. Salaries and wages total $3,850 per month. Rent is $3,150 per month. Taxes to be paid in October are $1,635. LeeAnn usually withdraws $3,500 each month as her salary. Advertising is $1,500 per month. Other operating expenses total $3,800 per month. Internet and telephone fees are $320 per month. LeeAnn tells you that she expects cash sales of $5,000 and credit sales of $64,000 for October. She likes to have $3,000 on hand at the end of the month and is concerned about the potential October ending balance. Required: Prepare a cash budget for October. Include supporting schedules for cash collections and cash payments. Round your intermediate computations and final answers to the nearest dollar. Beginning cash balance $fill in the blank 7e5bce06d043015_1 Collections: Cash sales fill in the blank 7e5bce06d043015_2 Credit sales: October fill in the blank 7e5bce06d043015_3 September fill in the blank 7e5bce06d043015_4 August fill in the blank 7e5bce06d043015_5 Total cash available $fill in the blank 7e5bce06d043015_6 Disbursements: Inventory purchases: October $fill in the blank 7e5bce06d043015_7 September fill in the blank 7e5bce06d043015_8 Salaries and wages fill in the blank 7e5bce06d043015_9 Rent fill in the blank 7e5bce06d043015_10 Taxes fill in the blank 7e5bce06d043015_11 Other operating expenses fill in the blank 7e5bce06d043015_12 Owner withdrawal fill in the blank 7e5bce06d043015_13 Advertising fill in the blank 7e5bce06d043015_14 Internet and telephone fill in the blank 7e5bce06d043015_15 fill in the blank 7e5bce06d043015_16 Ending cash balance
Cash Budget LeeAnn Ortiz owns a retail store that sells new and used sporting equipment. LeeAnn has requested a cash budget for October. After examining the records of the company, you find the following: Cash balance on October 1 is $1,120. Actual sales for August and September are as follows: August September Cash sales $6,000 $4,500 Credit sales 57,000 61,000 Total sales $63,000 $65,500 Credit sales are collected over a three-month period: 40 percent in the month of sale, 36 percent in the next month, and 22 percent in the second month after the sale. The remaining sales are uncollectible. Inventory purchases average 70 percent of a month's total sales. Of those purchases, 45 percent are paid for in the month of purchase. The remaining 55 percent are paid for in the following month. Salaries and wages total $3,850 per month. Rent is $3,150 per month. Taxes to be paid in October are $1,635. LeeAnn usually withdraws $3,500 each month as her salary. Advertising is $1,500 per month. Other operating expenses total $3,800 per month. Internet and telephone fees are $320 per month. LeeAnn tells you that she expects cash sales of $5,000 and credit sales of $64,000 for October. She likes to have $3,000 on hand at the end of the month and is concerned about the potential October ending balance. Required: Prepare a cash budget for October. Include supporting schedules for cash collections and cash payments. Round your intermediate computations and final answers to the nearest dollar. Beginning cash balance $fill in the blank 7e5bce06d043015_1 Collections: Cash sales fill in the blank 7e5bce06d043015_2 Credit sales: October fill in the blank 7e5bce06d043015_3 September fill in the blank 7e5bce06d043015_4 August fill in the blank 7e5bce06d043015_5 Total cash available $fill in the blank 7e5bce06d043015_6 Disbursements: Inventory purchases: October $fill in the blank 7e5bce06d043015_7 September fill in the blank 7e5bce06d043015_8 Salaries and wages fill in the blank 7e5bce06d043015_9 Rent fill in the blank 7e5bce06d043015_10 Taxes fill in the blank 7e5bce06d043015_11 Other operating expenses fill in the blank 7e5bce06d043015_12 Owner withdrawal fill in the blank 7e5bce06d043015_13 Advertising fill in the blank 7e5bce06d043015_14 Internet and telephone fill in the blank 7e5bce06d043015_15 fill in the blank 7e5bce06d043015_16 Ending cash balance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
LeeAnn Ortiz owns a retail store that sells new and used sporting equipment. LeeAnn has requested a cash budget for October. After examining the records of the company, you find the following:
- Cash balance on October 1 is $1,120.
- Actual sales for August and September are as follows:
August September Cash sales $6,000 $4,500 Credit sales 57,000 61,000 Total sales $63,000 $65,500 - Credit sales are collected over a three-month period: 40 percent in the month of sale, 36 percent in the next month, and 22 percent in the second month after the sale. The remaining sales are uncollectible.
- Inventory purchases average 70 percent of a month's total sales. Of those purchases, 45 percent are paid for in the month of purchase. The remaining 55 percent are paid for in the following month.
- Salaries and wages total $3,850 per month.
- Rent is $3,150 per month.
- Taxes to be paid in October are $1,635.
- LeeAnn usually withdraws $3,500 each month as her salary.
- Advertising is $1,500 per month.
- Other operating expenses total $3,800 per month.
- Internet and telephone fees are $320 per month.
LeeAnn tells you that she expects cash sales of $5,000 and credit sales of $64,000 for October. She likes to have $3,000 on hand at the end of the month and is concerned about the potential October ending balance.
Required:
Prepare a cash budget for October. Include supporting schedules for cash collections and cash payments. Round your intermediate computations and final answers to the nearest dollar.
Beginning cash balance | $fill in the blank 7e5bce06d043015_1 | |
Collections: | ||
Cash sales | fill in the blank 7e5bce06d043015_2 | |
Credit sales: | ||
October | fill in the blank 7e5bce06d043015_3 | |
September | fill in the blank 7e5bce06d043015_4 | |
August | fill in the blank 7e5bce06d043015_5 | |
Total cash available | $fill in the blank 7e5bce06d043015_6 | |
Disbursements: | ||
Inventory purchases: | ||
October | $fill in the blank 7e5bce06d043015_7 | |
September | fill in the blank 7e5bce06d043015_8 | |
Salaries and wages | fill in the blank 7e5bce06d043015_9 | |
Rent | fill in the blank 7e5bce06d043015_10 | |
Taxes | fill in the blank 7e5bce06d043015_11 | |
Other operating expenses | fill in the blank 7e5bce06d043015_12 | |
Owner withdrawal | fill in the blank 7e5bce06d043015_13 | |
Advertising | fill in the blank 7e5bce06d043015_14 | |
Internet and telephone | fill in the blank 7e5bce06d043015_15 | fill in the blank 7e5bce06d043015_16 |
Ending cash balance |
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