Develop a cash budget for the next three months using the information provided below. Monthly sales forecasts are $150,000, $180,000, and $60,000 (June, July, August) The current month's sales are $120,000 (May) Cost of goods sold equals 65% of sales Lease payment= 22,000 per month The company is required to pay an installment of $120,000 for a note (debt) The cash position at the end of the current month is $80,000 The target cash balance is $50,000 Assume that 60% of sales are collected in the month sold and the remaining collected in the following month.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Develop a cash budget for the next three months using the information provided below.
Monthly sales forecasts are $150,000, $180,000, and $60,000 (June, July, August)
The current month's sales are $120,000 (May)
Cost of goods sold equals 65% of sales
Lease payment= 22,000 per month
The company is required to pay an installment of $120,000 for a note (debt)
The cash position at the end of the current month is $80,000
The target cash balance is $50,000
Assume that 60% of sales are collected in the month sold and the remaining collected in the following month.
Transcribed Image Text:Develop a cash budget for the next three months using the information provided below. Monthly sales forecasts are $150,000, $180,000, and $60,000 (June, July, August) The current month's sales are $120,000 (May) Cost of goods sold equals 65% of sales Lease payment= 22,000 per month The company is required to pay an installment of $120,000 for a note (debt) The cash position at the end of the current month is $80,000 The target cash balance is $50,000 Assume that 60% of sales are collected in the month sold and the remaining collected in the following month.
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