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Exercise 22-27A (Algo) Merchandising: Preparing a cash budget LO P4 Use the following information to prepare the July cash budget for Acco Company. Ignore the "Loan activity" section of the budget a. Beginning cash balance on July 1: $74,000. b. Budgeted cash receipts from sales: 25% is collected in the month of sale, 50% in the next month, and 25% in the second month after sale. Sales amounts are May (actual), $1,730,000; June (actual), $1,200,000, and July (budgeted), $1,530,000. c. Budgeted cash payments on merchandise purchases: 85% in the month of purchase and 15% in the month following purchase. Purchase amounts are June (actual), $410,000; and July (budgeted), $460,000. d. Budgeted cash payments for salaries in July: $330,000. e. Budgeted cash payments for sales commissions for July: $290,000. f. Budgeted cash payment for income taxes in July: $70,000. g. Budgeted cash payment for loan interest in July: $10,000.

Exercise 22-27A (Algo) Merchandising: Preparing a cash budget LO P4 Use the following information to prepare the July cash budget for Acco Company. Ignore the "Loan activity" section of the budget a. Beginning cash balance on July 1: $74,000. b. Budgeted cash receipts from sales: 25% is collected in the month of sale, 50% in the next month, and 25% in the second month after sale. Sales amounts are May (actual), $1,730,000; June (actual), $1,200,000, and July (budgeted), $1,530,000. c. Budgeted cash payments on merchandise purchases: 85% in the month of purchase and 15% in the month following purchase. Purchase amounts are June (actual), $410,000; and July (budgeted), $460,000. d. Budgeted cash payments for salaries in July: $330,000. e. Budgeted cash payments for sales commissions for July: $290,000. f. Budgeted cash payment for income taxes in July: $70,000. g. Budgeted cash payment for loan interest in July: $10,000.

FINANCIAL ACCOUNTING
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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Exercise 22-27A (Algo) Merchandising: Preparing a cash budget LO P4 Use the following information to prepare the July cash budget for Acco Company. Ignore the "Loan activity" section of the budget a. Beginning cash balance on July 1: $74,000. b. Budgeted cash receipts from sales: 25% is collected in the month of sale, 50% in the next month, and 25% in the second month after sale. Sales amounts are May (actual), $1,730,000; June (actual), $1,200,000; and July (budgeted), $1,530,000. c. Budgeted cash payments on merchandise purchases: 85% in the month of purchase and 15% in the month following purchase. Purchase amounts are June (actual). $410,000; and July (budgeted), $460,000. d. Budgeted cash payments for salaries in July: $330,000. e. Budgeted cash payments for sales commissions for July: $290,000. f. Budgeted cash payment for income taxes in July: $70,000. g. Budgeted cash payment for loan interest in July: $10,000.
Transcribed Image Text:Exercise 22-27A (Algo) Merchandising: Preparing a cash budget LO P4 Use the following information to prepare the July cash budget for Acco Company. Ignore the "Loan activity" section of the budget a. Beginning cash balance on July 1: $74,000. b. Budgeted cash receipts from sales: 25% is collected in the month of sale, 50% in the next month, and 25% in the second month after sale. Sales amounts are May (actual), $1,730,000; June (actual), $1,200,000; and July (budgeted), $1,530,000. c. Budgeted cash payments on merchandise purchases: 85% in the month of purchase and 15% in the month following purchase. Purchase amounts are June (actual). $410,000; and July (budgeted), $460,000. d. Budgeted cash payments for salaries in July: $330,000. e. Budgeted cash payments for sales commissions for July: $290,000. f. Budgeted cash payment for income taxes in July: $70,000. g. Budgeted cash payment for loan interest in July: $10,000.
Calculation Calculate the budgeted cash receipts and cash payments. Cash Budget Credit sales from May June July Totals Purchases from June July Totals Total cash available Less Cash payments for $ Total cash payments S Total Sales Calculation of Cash Receipts from Sales Collected in June S $ 1,730,000 1,200,000 1,530,000 4,460,000 Total Purchases Calculation of Cash Payments for Merchandise. Paid in May 410,000 460,000 870,000 Calculation Cash Budget Prepare the July cash budget for Acco Company. ACCO COMPANY Cash Budget June July July July July 31 Accounts Receivable July 31 Accounts payable
Transcribed Image Text:Calculation Calculate the budgeted cash receipts and cash payments. Cash Budget Credit sales from May June July Totals Purchases from June July Totals Total cash available Less Cash payments for $ Total cash payments S Total Sales Calculation of Cash Receipts from Sales Collected in June S $ 1,730,000 1,200,000 1,530,000 4,460,000 Total Purchases Calculation of Cash Payments for Merchandise. Paid in May 410,000 460,000 870,000 Calculation Cash Budget Prepare the July cash budget for Acco Company. ACCO COMPANY Cash Budget June July July July July 31 Accounts Receivable July 31 Accounts payable
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