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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1cdc64b9-d40a-4f0b-a759-475d5d422ac4%2Fbac71821-9b6d-40a4-b98b-668db2b00bb4%2Fqu588bd_processed.jpeg&w=3840&q=75)
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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