Prepare a cash budget for the month ended May 31, 2019. Campton Company anticipates a cash balance of $79,000 on May 1, 2019. The following budgeted transactions for May 2019 present data related to anticipated cash receipts and cash disbursements: 1. For May, budgeted cash sales are $55,000 and budgeted credit sales are $495,000. (Credit sales for April were $450,000.) In the month of sale, 40% of credit sales are collected, with the balance collected in the month following sale. 2. Budgeted merchandise purchases for May are $275,000. (Merchandise purchases in April were $240,000.) In the month of purchase, 70% of merchandise purchases are paid for, and the balance is paid for in the following month. 3. Budgeted cash disbursements for salaries and operating expenses for May total $160,000. 4. During May, $25,000 of principal repayment and $4,000 of interest payment are due to the bank. 5. A $20,000 income tax deposit is due to the federal government during May. 6. A new delivery truck will be purchased during May for $5,000 cash and an $8,000 note payable. Depreciation for May will be $475. Prepare a cash budget for Campton Company for the month of May 2019.

Prepare a cash budget for the month ended May 31, 2019. Campton Company anticipates a cash balance of $79,000 on May 1, 2019. The following budgeted transactions for May 2019 present data related to anticipated cash receipts and cash disbursements: 1. For May, budgeted cash sales are $55,000 and budgeted credit sales are $495,000. (Credit sales for April were $450,000.) In the month of sale, 40% of credit sales are collected, with the balance collected in the month following sale. 2. Budgeted merchandise purchases for May are $275,000. (Merchandise purchases in April were $240,000.) In the month of purchase, 70% of merchandise purchases are paid for, and the balance is paid for in the following month. 3. Budgeted cash disbursements for salaries and operating expenses for May total $160,000. 4. During May, $25,000 of principal repayment and $4,000 of interest payment are due to the bank. 5. A $20,000 income tax deposit is due to the federal government during May. 6. A new delivery truck will be purchased during May for $5,000 cash and an $8,000 note payable. Depreciation for May will be $475. Prepare a cash budget for Campton Company for the month of May 2019.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

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

Prepare a cash budget for the month ended May 31, 2019. Campton Company anticipates a cash balance of $79,000 on May 1, 2019. The
following budgeted transactions for May 2019 present data related to anticipated cash receipts and cash disbursements:
1. For May, budgeted cash sales are $55,000 and budgeted credit sales are $495,000. (Credit sales for April were $450,000.) In the month
of sale, 40% of credit sales are collected, with the balance collected in the month following sale.
2. Budgeted merchandise purchases for May are $275,000. (Merchandise purchases in April were $240,000.) In the month of purchase,
70% of merchandise purchases are paid for, and the balance is paid for in the following month.
3. Budgeted cash disbursements for salaries and operating expenses for May total $160,000.
4. During May, $25,000 of principal repayment and $4,000 of interest payment are due to the bank.
5. A $20,000 income tax deposit is due to the federal government during May.
6. A new delivery truck will be purchased during May for $5,000 cash and an $8,000 note payable. Depreciation for May will be $475.
Prepare a cash budget for Campton Company for the month of May 2019.

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