Pencil Supply expects to have the sales and expenses shown for May, June, and July. The company expects to receive 70% of the sales in the month of the sale, 25% thefollowing month, and 5% to be uncollectible. The company’s policy to pay manufacturing cost includes 65% in the month incurred and 35% the following month. All other costs are paid in the month incurred. In addition, the company must pay an income tax payment in July, which the company estimates will be 10% of total sales for the quarter. The company will also receive interest revenue of $1,200 in June. April May June July Sales $102,500 $100,000 $105,200 $107,100 Manufacturing costs 30,000 34,500 38,000 36,500 Selling expenses 14,900 14,900 22,500 15,000 Administrative expenses 20,000 20,000 22,500 25,000 Prepare the cash budget for the three months if the cash balance as of May 1, 2015, totaled $102,000. The company requires a $100,000 minimum cash balance.
Pencil Supply expects to have the sales and expenses shown for May, June, and July. The company expects to receive 70% of the sales in the month of the sale, 25% thefollowing month, and 5% to be uncollectible. The company’s policy to pay manufacturing cost includes 65% in the month incurred and 35% the following month. All other costs are paid in the month incurred. In addition, the company must pay an income tax payment in July, which the company estimates will be 10% of total sales for the quarter. The company will also receive interest revenue of $1,200 in June. April May June July Sales $102,500 $100,000 $105,200 $107,100 Manufacturing costs 30,000 34,500 38,000 36,500 Selling expenses 14,900 14,900 22,500 15,000 Administrative expenses 20,000 20,000 22,500 25,000 Prepare the cash budget for the three months if the cash balance as of May 1, 2015, totaled $102,000. The company requires a $100,000 minimum cash balance.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Cash Budget
Pencil Supply expects to have the sales and expenses shown for May, June,
and July. The company expects to receive 70% of the sales in the month of the sale,
25% thefollowing month, and 5% to be uncollectible. The company’s policy to pay
manufacturing cost includes 65% in the month incurred and 35% the following
month. All other costs are paid in the month incurred. In addition, the company must
pay an income tax payment in July, which the company estimates will be 10% of total
sales for the quarter. The company will also receive interest revenue of $1,200 in
June.
| April | May | June | July | |
| Sales | $102,500 | $100,000 | $105,200 | $107,100 |
| 30,000 | 34,500 | 38,000 | 36,500 | |
| Selling expenses | 14,900 | 14,900 | 22,500 | 15,000 |
| Administrative expenses | 20,000 | 20,000 | 22,500 | 25,000 |
Prepare the cash budget for the three months if the cash balance as of May 1, 2015,
totaled $102,000. The company requires a $100,000 minimum cash balance.
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