Patrick's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows: Month January. February. Sales Revenue $250,000 350,000 Month March.... April All sales are on credit; 75% is collected during the month of sale, and 25% is collected during the next month. Cost of goods sold is 70% of sales. Payments for merchandise sold are made in the month fol- lowing the month of sale. Operating expenses total $125,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $55,000. Required Prepare monthly cash budgets for February, March, and April. Patrick's Retail Company Cash Budgets February, March, and April February March 55,000 $ 262,500 x 175,000 x 125,000 x 205,000 * $ Cash balance, beginning $ Total Cash receipts Cash available Total disbursements Cash balance, ending $ Sales Revenue $400,000 375,000 April 205,000 x $ 222,500 x 387,500✔ 381,250✔ 245,000 * 280,000 x 125,000 x 125,000 x 222,500 x 198,750 x $

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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M22-20. Cash Budget
Patrick's Retail Company is planning a cash budget for the next three months. Estimated sales revenue
is as follows:
Month
January.
February.
Sales Revenue
$250,000
350,000
Cash balance, beginning $.
Total Cash receipts
Cash available
All sales are on credit; 75% is collected during the month of sale, and 25% is collected during the next
month. Cost of goods sold is 70% of sales. Payments for merchandise sold are made in the month fol-
lowing the month of sale. Operating expenses total $125,000 per month and are paid during the month
incurred. The cash balance on February 1 is estimated to be $55,000.
Required
Prepare monthly cash budgets for February, March, and April.
Patrick's Retail Company
Cash Budgets
February, March, and April
February
March
55,000 $
205,000 * $
387,500
245,000 *
125,000 x
222,500 x $
Total disbursements
Cash balance, ending $
Month
March
April
262,500 x
175,000 *
125,000 *
205,000 * $
Sales Revenue
$400,000
375,000
April
222,500 x
381,250
280,000 x
125,000 x
198,750 x
Transcribed Image Text:M22-20. Cash Budget Patrick's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows: Month January. February. Sales Revenue $250,000 350,000 Cash balance, beginning $. Total Cash receipts Cash available All sales are on credit; 75% is collected during the month of sale, and 25% is collected during the next month. Cost of goods sold is 70% of sales. Payments for merchandise sold are made in the month fol- lowing the month of sale. Operating expenses total $125,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $55,000. Required Prepare monthly cash budgets for February, March, and April. Patrick's Retail Company Cash Budgets February, March, and April February March 55,000 $ 205,000 * $ 387,500 245,000 * 125,000 x 222,500 x $ Total disbursements Cash balance, ending $ Month March April 262,500 x 175,000 * 125,000 * 205,000 * $ Sales Revenue $400,000 375,000 April 222,500 x 381,250 280,000 x 125,000 x 198,750 x
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