h budget-Basic Grenoble Enterprises had sales of $50, 100 in March and $59,800 in April. Forecast sales for May, June, and July are $70,400, $79,700, and $99,800, respectively. The firm has a cash balance of $4,800 on May 1 and wishes to maintain a minimum cash balance of $4,800. Given th owing data, prepare and interpret a cash budget for the months of May, June, and July. The firm makes 23% of sales for cash, 64% are collected in the next month, and the remaining 13% are collected in the second month following sale. The firm receives other income of $2,100 per month. The firm's actual or expected purchases, all made for cash, are $50,400, $69,900, and $79,800 for the months of May through July, respectively. Rent is $3,000 per month. Wages and salaries are 8% of the previous month's sales. Cash dividends of $3,400 will be paid in June. Payment of principal and interest of $3,600 is due in June. A cash purchase of equipment costing $6,400 is scheduled in July Taxes of $6,500 are due in June. nmplete 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.) April Sales Cash sales Lag 1 month Lag 2 months Other income March $ 50,100 $ 11,523 59,800 $ 13,754 S $ $ $ May 70,400
h budget-Basic Grenoble Enterprises had sales of $50, 100 in March and $59,800 in April. Forecast sales for May, June, and July are $70,400, $79,700, and $99,800, respectively. The firm has a cash balance of $4,800 on May 1 and wishes to maintain a minimum cash balance of $4,800. Given th owing data, prepare and interpret a cash budget for the months of May, June, and July. The firm makes 23% of sales for cash, 64% are collected in the next month, and the remaining 13% are collected in the second month following sale. The firm receives other income of $2,100 per month. The firm's actual or expected purchases, all made for cash, are $50,400, $69,900, and $79,800 for the months of May through July, respectively. Rent is $3,000 per month. Wages and salaries are 8% of the previous month's sales. Cash dividends of $3,400 will be paid in June. Payment of principal and interest of $3,600 is due in June. A cash purchase of equipment costing $6,400 is scheduled in July Taxes of $6,500 are due in June. nmplete 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.) April Sales Cash sales Lag 1 month Lag 2 months Other income March $ 50,100 $ 11,523 59,800 $ 13,754 S $ $ $ May 70,400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Cash budget-Basic Grenoble Enterprises had sales of $50,100 in March and $59,800 in April. Forecast sales for May, June, and July are $70,400, $79,700, and $99,800, respectively. The firm has a cash balance of $4,800 on May 1 and wishes to maintain a minimum cash balance of $4,800. Given the
following data, prepare and interpret a cash budget for the months of May, June, and July.
(1) The firm makes 23% of sales for cash, 64% are collected in the next month, and the remaining 13% are collected in the second month following sale.
(2) The firm receives other income of $2,100 per month.
(3) The firm's actual or expected purchases, all made for cash, are $50,400, $69,900, and $79,800 for the months of May through July, respectively.
(4) Rent is $3,000 per month.
(5) Wages and salaries are 8% of the previous month's sales.
(6) Cash dividends of $3,400 will be paid in June.
(7) Payment of principal and interest of $3,600 is due in June.
(8) A cash purchase of equipment costing $6,400 is scheduled in July.
(9) Taxes of $6,500 are due 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.)
April
May
Sales
Cash sales
Lag 1 month
Lag 2 months
Other income
Total cash receipts
$
March
50,100 $
11,523
59,800 $
13,754 S
$
$
S
S
70,400
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