lounder, Inc. has budgeted sales revenues as follows Credit sales Cash sales Total sales June July August tast experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted inventory purchases are as follows: a) Credit sales Other cash disbursements budgeted: (a) selling and administrative expenses of $51,000 each month, (b) dividends of $105,000 will be paid in July, and (c) purchase of equipment in August for $34,000 cash the company's policy is to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money in this case is for one mont June July ✔Your answer is correct. Prepare separate schedules for expected collections from customers and expected payments for purchases of inventory. (Do not leave any answer field blank. Enter O for amounts) Schedule of Expected Collections from Customers August June $139,000 98.000 August $129,000 $ 95,000 254,000 200.000 $237,000 $383.000 $ 295.000 June $300.000 222.000 102,000 Total collections July August Inventory purchases July S Total payments $ July 55.400 July 77,400 0 133.000 Schedule of Expected Payments for Purchases of Inventory 150.000 111.000 0 S 261.000 $ August $ August $1,600 $7,000 108.600 0 111.000 $1,000 142.000
lounder, Inc. has budgeted sales revenues as follows Credit sales Cash sales Total sales June July August tast experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted inventory purchases are as follows: a) Credit sales Other cash disbursements budgeted: (a) selling and administrative expenses of $51,000 each month, (b) dividends of $105,000 will be paid in July, and (c) purchase of equipment in August for $34,000 cash the company's policy is to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money in this case is for one mont June July ✔Your answer is correct. Prepare separate schedules for expected collections from customers and expected payments for purchases of inventory. (Do not leave any answer field blank. Enter O for amounts) Schedule of Expected Collections from Customers August June $139,000 98.000 August $129,000 $ 95,000 254,000 200.000 $237,000 $383.000 $ 295.000 June $300.000 222.000 102,000 Total collections July August Inventory purchases July S Total payments $ July 55.400 July 77,400 0 133.000 Schedule of Expected Payments for Purchases of Inventory 150.000 111.000 0 S 261.000 $ August $ August $1,600 $7,000 108.600 0 111.000 $1,000 142.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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:Flounder, Inc. has budgeted sales revenues as follows:
Credit sales
Cash sales
Total sales
June
July
August
(a)
Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted inventory purchases are as follows:
Credit sales
June
July
July
August
$139,000 $129,000 $ 95.000
August
June
Other cash disbursements budgeted: (a) selling and administrative expenses of $51,000 each month, (b) dividends of $105,000 will be paid in July, and (c) purchase of equipment in August for $34,000 cash.
The company's policy is to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money in this case is for one month.
Your answer is correct.
98,000
June
Prepare separate schedules for expected collections from customers and expected payments for purchases of inventory. (Do not leave any answer field blank. Enter O for amounts.)
July
$237,000 $383,000 $ 295,000
$300,000
August
222,000
102,000
Total collections $
Inventory purchases
254,000
Schedule of Expected Collections from Customers
$
200,000
Total payments
$
$
July
55,600
77,400
0
133,000
Schedule of Expected Payments for Purchases of Inventory.
July
150,000
111,000
0
$
261,000
$
$
August
$
August
0
51,600
57,000
108,600
0
111,000
51,000
162,000
Transcribed Image Text:Prepare a cash budget for the months of July and August. (Do not leave any answer field blank. Enter O for amounts.)
>
>
FLOUNDER, INC.
Cash Budget
For the Two Months of July and August
<
> > >
<
>
$
$
July
$
$
August
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