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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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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