Forecast sales for May, June, and July are $69,600, $79,700, and $100,300, respectively. The firm has a cash balance of $5,500 on May 1 and wishes to maintain a minimum cash balance of $5,500. Given the following data, prepare and interpret a cash budget for the months of May, June, and July. (1) The firm makes 16% of sales for cash, 64% are collected in the next month, and the remaining 20% are collected in the second month following sale. (2) The firm receives other income of $1,800 per month. (3) The firm's actual or expected purchases, all made for cash, are $49,900, $70,300, and $79,700 for the months of May through July, respectively. (4) Rent is $2,600 per month. (5) Wages and salaries are 8% of the previous month's sales. (6) Cash dividends of $3,100 will be paid in June. Complete the first month of the cash budget for Grenoble Enterprises below: (Round to the nearest dollar. Please input all the values in the table before checking your answers.) 4 April Sales Cash sales Lag 1 month Lag 2 months Other income GEEEM Total cash receipts $ March 49,500 $ 7,920 59,600 $ 9,536 $ S S S May 69,600

Forecast sales for May, June, and July are $69,600, $79,700, and $100,300, respectively. The firm has a cash balance of $5,500 on May 1 and wishes to maintain a minimum cash balance of $5,500. Given the following data, prepare and interpret a cash budget for the months of May, June, and July. (1) The firm makes 16% of sales for cash, 64% are collected in the next month, and the remaining 20% are collected in the second month following sale. (2) The firm receives other income of $1,800 per month. (3) The firm's actual or expected purchases, all made for cash, are $49,900, $70,300, and $79,700 for the months of May through July, respectively. (4) Rent is $2,600 per month. (5) Wages and salaries are 8% of the previous month's sales. (6) Cash dividends of $3,100 will be paid in June. Complete the first month of the cash budget for Grenoble Enterprises below: (Round to the nearest dollar. Please input all the values in the table before checking your answers.) 4 April Sales Cash sales Lag 1 month Lag 2 months Other income GEEEM Total cash receipts $ March 49,500 $ 7,920 59,600 $ 9,536 $ S S S May 69,600

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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