gift shops and department stores throughout the United States. Khloe provided the following information: tober 31 balance in the cash account is $53,817. s are on account. Sales in September were $950,000 and in October were $1,240,000. ber sales are expected to be $2,145,000. e's experience, 70 percent of sales are collected in the month of sale and 28 percent are collected in the month following sale. The ing credit sales are uncollectible. purchases all merchandise on account. Purchases in September were $750,000 and in October were $980,000. November purchases pected to be $2,000,000 as Khloe prepares for the Christmas buying season. Fifteen percent of purchases are paid in the month of while the remainder is paid in the month following the purchase month. Company has nine employees who are paid a total of $48,000 per month. Due to timing issues, about 90 percent of total wages are the month earned and the remaining 10 percent are paid in the following month. or office and warehouse space is $12,300 paid monthly in cash. s average $6,100 per month and are paid in cash. ember, Khloe expects to pay employment taxes of $6,625. Khloe imports product from overseas, customs duty and shipping to the central location of 30 percent of current monthly purchase

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question
Do not give any kind of plagiarism content
Cash Budget
Khloe Company imports gift items from overseas and sells them to gift shops and department stores throughout the United States. Khloe
Company provided the following information:
a. The October 31 balance in the cash account is $53,817.
b. All sales are on account. Sales in September were $950,000 and in October were $1,240,000.
c. November sales are expected to be $2,145,000.
d. In Khloe's experience, 70 percent of sales are collected in the month of sale and 28 percent are collected in the month following sale. The
remaining credit sales are uncollectible.
e. Khloe purchases all merchandise on account. Purchases in September were $750,000 and in October were $980,000. November purchases
are expected to be $2,000,000 as Khloe prepares for the Christmas buying season. Fifteen percent of purchases are paid in the month of
purchase, while the remainder is paid in the month following the purchase month.
f. Khloe Company has nine employees who are paid a total of $48,000 per month. Due to timing issues, about 90 percent of total wages are
paid in the month earned and the remaining 10 percent are paid in the following month.
g. Rent for office and warehouse space is $12,300 paid monthly in cash.
h. Utilities average $6,100 per month and are paid in cash.
I. In November, Khloe expects to pay employment taxes of $6,625.
J. Since Khloe imports product from overseas, customs duty and shipping to the central location of 30 percent of current monthly purchase
cost must be paid in the month of purchase.
k. Other cash expenses for November are expected to be $41,500.
Required:
Prepare a cash budget for Khloe Company for the month of November.
Khloe Company
Cash Budget
For the Month of November
Beginning balance, cash account
Received on account from sales in:
October
For the Month of November
November
Total cash available
Disbursements:
Payments for purchases made in:
October
November
Salaries paid for work in:
October
November
Rent
Utilities
Employment taxes
Customs duty and shipping
Other cash expenses
Total disbursements
Ending cash balance
53,817 ✔
1,501,500 X
347,200 X
$1,902,517 ✔
300,000 X
833,000 X
43,200 X
4,800 X
12,300
6,100
6,625
600,000
41,500
54,992 X
54,992
Transcribed Image Text:Cash Budget Khloe Company imports gift items from overseas and sells them to gift shops and department stores throughout the United States. Khloe Company provided the following information: a. The October 31 balance in the cash account is $53,817. b. All sales are on account. Sales in September were $950,000 and in October were $1,240,000. c. November sales are expected to be $2,145,000. d. In Khloe's experience, 70 percent of sales are collected in the month of sale and 28 percent are collected in the month following sale. The remaining credit sales are uncollectible. e. Khloe purchases all merchandise on account. Purchases in September were $750,000 and in October were $980,000. November purchases are expected to be $2,000,000 as Khloe prepares for the Christmas buying season. Fifteen percent of purchases are paid in the month of purchase, while the remainder is paid in the month following the purchase month. f. Khloe Company has nine employees who are paid a total of $48,000 per month. Due to timing issues, about 90 percent of total wages are paid in the month earned and the remaining 10 percent are paid in the following month. g. Rent for office and warehouse space is $12,300 paid monthly in cash. h. Utilities average $6,100 per month and are paid in cash. I. In November, Khloe expects to pay employment taxes of $6,625. J. Since Khloe imports product from overseas, customs duty and shipping to the central location of 30 percent of current monthly purchase cost must be paid in the month of purchase. k. Other cash expenses for November are expected to be $41,500. Required: Prepare a cash budget for Khloe Company for the month of November. Khloe Company Cash Budget For the Month of November Beginning balance, cash account Received on account from sales in: October For the Month of November November Total cash available Disbursements: Payments for purchases made in: October November Salaries paid for work in: October November Rent Utilities Employment taxes Customs duty and shipping Other cash expenses Total disbursements Ending cash balance 53,817 ✔ 1,501,500 X 347,200 X $1,902,517 ✔ 300,000 X 833,000 X 43,200 X 4,800 X 12,300 6,100 6,625 600,000 41,500 54,992 X 54,992
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 3 images

Blurred answer
Knowledge Booster
Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education