Castor Incorporated is preparing its master budget. Budgeted sales and cash payments for merchandise purchases for the next three months follow. Budgeted Sales Cash payments for merchandise purchases April $ 32,000 20,200 May $ 40,000 16,800 June $ 24,000 17,200 Sales are 50% cash and 50% on credit. Sales in March were $24,000. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $12,000 in cash and $2,000 in loans payable. A minimum cash balance of $12,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $12,000. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If a preliminary cash balance above $12,000 at month-end exists, loans are repaid from the excess. Expenses are paid in the month incurred and include sales commissions (10% of sales), shipping (2% of sales), office salaries ($5,000 per month), and rent ($3,000 per month). (a) Prepare a schedule of cash receipts from sales for April, May, and June. (b) Prepare a cash budget for each of April, May, and June. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar. Cash receipts from CASTOR INCORPORATED Schedule of Cash Receipts from Sales April May June $ 32,000 $ 40,000 $ 24,000 < Prev 8 of 8 Next >
Castor Incorporated is preparing its master budget. Budgeted sales and cash payments for merchandise purchases for the next three months follow. Budgeted Sales Cash payments for merchandise purchases April $ 32,000 20,200 May $ 40,000 16,800 June $ 24,000 17,200 Sales are 50% cash and 50% on credit. Sales in March were $24,000. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $12,000 in cash and $2,000 in loans payable. A minimum cash balance of $12,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $12,000. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If a preliminary cash balance above $12,000 at month-end exists, loans are repaid from the excess. Expenses are paid in the month incurred and include sales commissions (10% of sales), shipping (2% of sales), office salaries ($5,000 per month), and rent ($3,000 per month). (a) Prepare a schedule of cash receipts from sales for April, May, and June. (b) Prepare a cash budget for each of April, May, and June. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar. Cash receipts from CASTOR INCORPORATED Schedule of Cash Receipts from Sales April May June $ 32,000 $ 40,000 $ 24,000 < Prev 8 of 8 Next >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Castor Incorporated is preparing its master budget. Budgeted sales and cash payments for merchandise purchases for the
next three months follow.
Budgeted
Sales
Cash payments for merchandise purchases
April
$ 32,000
20,200
May
$ 40,000
16,800
June
$ 24,000
17,200
Sales are 50% cash and 50% on credit. Sales in March were $24,000. All credit sales are collected in the month following
the sale. The March 31 balance sheet includes balances of $12,000 in cash and $2,000 in loans payable. A minimum cash
balance of $12,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below
$12,000. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If a
preliminary cash balance above $12,000 at month-end exists, loans are repaid from the excess. Expenses are paid in the
month incurred and include sales commissions (10% of sales), shipping (2% of sales), office salaries ($5,000 per month), and
rent ($3,000 per month).
(a) Prepare a schedule of cash receipts from sales for April, May, and June.
(b) Prepare a cash budget for each of April, May, and June.
Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final
answers to the nearest whole dollar.
Cash receipts from
CASTOR INCORPORATED
Schedule of Cash Receipts from Sales
April
May
June
$
32,000 $
40,000 $
24,000
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