Kevin Montgomery Retail seeks your assistance to develop cash and other budget information for May, June, and July. At April 30, the company had cashof $14,500, accounts receivable of $473,000, inventories of $482,250, and accounts payable of $169,055. The budget is to be based on the followingassumptions:SALES:Each month's sales are billed on the last day of the month. Customers are allowed a 3% discount if payment is made within 10 days after the billing date.Receivables are recorded in the accounts at their gross amounts (not net of discounts). 55% of the billings are collected within the discount period; 30% arecollected by the end of the month; 9% are collected by the end of the second month; and 6% turn out to be uncollectible.PURCHASES:The marketing, general, and administrative expenses and 60% of all purchases of merchandise are paid in the month purchased, with the remainder ofmerchandise purchases paid in the following month. The number of units in each month's ending inventory is equal to 125% of the next month's sales(units). The cost of each unit of inventory is $30. Marketing, general, and administrative expenses, of which $39,000 is depreciation, are equal to 15% of thecurrent month's sales.Actual and projected sales are as shown below:DollarsUnits$508,000$520,000March15,400April15,700$512,000$492,000МMay15,500June15,000July$516,00015,600August $516,00015,800What are the budgeted cash disbursements during the month of June?Multiple Choice$499,820.$482,730.$514,430.$496,800.

A Cash Budget is a forecast of expected cash receipts & expected cash payments. The Cash Budget…

$14,500, accounts receivable of $473,000, inventories of $482,250, and accounts payable of $169,055. The budget is to sumptions: ALES: ch month's sales are billed on the last day of the month. Customers are allowed a 3% discount if payment is made within eceivables are recorded in the accounts at their gross amounts (not net of discounts). 55% of the billings are collected with ollected by the end of the month; 9% are collected by the end of the second month; and 6% turn out to be uncollectible. URCHASES: he marketing, general, and administrative expenses and 60% of all purchases of merchandise are paid in the month purch erchandise purchases paid in the following month. The number of units in each month's ending inventory is equal to 125% nits). The cost of each unit of inventory is $30. Marketing, general, and administrative expenses, of which $39,000 is depr arrent month's sales. tual and proiected sales are as shown below:

$14,500, accounts receivable of $473,000, inventories of $482,250, and accounts payable of $169,055. The budget is to sumptions: ALES: ch month's sales are billed on the last day of the month. Customers are allowed a 3% discount if payment is made within eceivables are recorded in the accounts at their gross amounts (not net of discounts). 55% of the billings are collected with ollected by the end of the month; 9% are collected by the end of the second month; and 6% turn out to be uncollectible. URCHASES: he marketing, general, and administrative expenses and 60% of all purchases of merchandise are paid in the month purch erchandise purchases paid in the following month. The number of units in each month's ending inventory is equal to 125% nits). The cost of each unit of inventory is $30. Marketing, general, and administrative expenses, of which $39,000 is depr arrent month's sales. tual and proiected sales are as shown below:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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