Prepare Cash Budget from Budgeted Transactions Prepare a cash budget for the month ended May 31, 2019. Campton Company anticipates a cash balance of $89,000 on May 1, 2019. The following budgeted transactions for May 2019 present data related to anticipated cas receipts and cash disbursements: 1. For May, budgeted cash sales are $65,000 and budgeted credit sales are $505,000. (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 $285,000. (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 $170,000. 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 $7,000 cash and an $8,000 note payable. Depreciation for May will be $525. Prepare a cash budget for Campton Company for the month of May 2019. Campton Company

Prepare Cash Budget from Budgeted Transactions Prepare a cash budget for the month ended May 31, 2019. Campton Company anticipates a cash balance of $89,000 on May 1, 2019. The following budgeted transactions for May 2019 present data related to anticipated cas receipts and cash disbursements: 1. For May, budgeted cash sales are $65,000 and budgeted credit sales are $505,000. (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 $285,000. (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 $170,000. 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 $7,000 cash and an $8,000 note payable. Depreciation for May will be $525. Prepare a cash budget for Campton Company for the month of May 2019. Campton Company

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

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Chapter4: Financial Planning And Forecasting

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Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Prepare Cash Budget from Budgeted Transactions
Prepare a cash budget for the month ended May 31, 2019. Campton Company anticipates a cash balance of $89,000 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 $65,000 and budgeted credit sales are $505,000. (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 $285,000. (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 $170,000.
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 $7,000 cash and an $8,000 note payable. Depreciation for May will be $525.
Prepare a cash budget for Campton Company for the month of May 2019.
Campton Company
Cash Budget
For the Month Ended May 31, 2019
Beginning cash balance
2$
Cash receipts:
Cash sales
0 x
Collections on credit sales
Cash available
2$
0 x
Cash disbursements:
Payments for merchandise
$
Salaries and operating expense payments
Principal and interest payment
0 x
Income tax deposit
Payment on truck
Total cash disbursements
2$
Ending cash balance
2$
89,900 x
Check

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