Month April (Actual) May (Actual) une (Forecasted) uly (Forecasted) August (Forecasted) 390,000 September (Forecasted) 420,000 ● ● ● ● ● . Sales 410,000 400,000 380,000 360,000 Purchases 220,000 210,000 200,000 250,000 300,000 200,000 The company makes 10 percent of its sales for cash and 90 percent on credit. Of the credit sales: O 20% are collected in the month after the sale O 78% are collected two months after O 2% of sales are never collected and are written of as bad debts Variable Labour expense equals 10% of the current month's sales Fixed Labour expense is equal to $10,000 per month Overhead expenses of $8,000 per month should be expected Fixed debt payments of $40,000 are due in June and again in September Cash dividend of $20,000 is scheduled to be paid in June Tax installments of $35,000 are due in June and September There is a schedule capital outlay of $300,000 in September Depreciation is $20,000 per month Ending cash balance a in May is $20,000 Minimum desired balance at the end of any month is $50,000 Excess balances above $50,000 are invested in money market securities for 30 days and generate a return of 2.1% per annum. If the ending balance is below $15,000, money is borrowed from the company's line of credit at 12% per annum.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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(cash budget from excel)
Preparing a Cash Budget
Smith's Avionics actual sales and purchases for April and May are show here, along with forecasted sales
and purchases for June through September.
Month
Sales
April (Actual)
410,000
May (Actual)
400,000
June (Forecasted)
380,000
July (Forecasted)
360,000
August (Forecasted)
390,000
September (Forecasted) 420,000
The company makes 10 percent of its sales for cash and 90 percent on credit. Of the credit sales:
O
20% are collected in the month after the sale
78% are collected two months after
O 2% of sales are never collected and are written of as bad debts
Variable Labour expense equals 10% of the current month's sales
Fixed Labour expense is equal to $10,000 per month
● Overhead expenses of $8,000 per month should be expected
Fixed debt payments of $40,000 are due in June and again in September
Cash dividend of $20,000 is scheduled to be paid in June
Tax installments of $35,000 are due in June and September
There is a schedule capital outlay of $300,000 in September
Depreciation is $20,000 per month
Ending cash balance a in May is $20,000
Minimum desired balance at the end of any month is $50,000
●
●
●
●
●
●
●
●
.
●
●
Purchases
220,000
210,000
200,000
250,000
300,000
200,000
Excess balances above $50,000 are invested in money market securities for 30 days and
generate a return of 2.1% per annum.
If the ending balance is below $15,000, money is borrowed from the company's line of credit at
12% per annum.
Transcribed Image Text:(cash budget from excel) Preparing a Cash Budget Smith's Avionics actual sales and purchases for April and May are show here, along with forecasted sales and purchases for June through September. Month Sales April (Actual) 410,000 May (Actual) 400,000 June (Forecasted) 380,000 July (Forecasted) 360,000 August (Forecasted) 390,000 September (Forecasted) 420,000 The company makes 10 percent of its sales for cash and 90 percent on credit. Of the credit sales: O 20% are collected in the month after the sale 78% are collected two months after O 2% of sales are never collected and are written of as bad debts Variable Labour expense equals 10% of the current month's sales Fixed Labour expense is equal to $10,000 per month ● Overhead expenses of $8,000 per month should be expected Fixed debt payments of $40,000 are due in June and again in September Cash dividend of $20,000 is scheduled to be paid in June Tax installments of $35,000 are due in June and September There is a schedule capital outlay of $300,000 in September Depreciation is $20,000 per month Ending cash balance a in May is $20,000 Minimum desired balance at the end of any month is $50,000 ● ● ● ● ● ● ● ● . ● ● Purchases 220,000 210,000 200,000 250,000 300,000 200,000 Excess balances above $50,000 are invested in money market securities for 30 days and generate a return of 2.1% per annum. If the ending balance is below $15,000, money is borrowed from the company's line of credit at 12% per annum.
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