Prepare Cash Budget from Budgeted Transactions Prepare a cash budget for the month ended May 31. Campton Company anticipates a cash balance of $84,000 on May 1. The following budgeted transactions for May present data related to anticipated cash receipts and cash disbursements: 1. For May, budgeted cash sales are $60,000 and budgeted credit sales are $500,000. (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 $280,000. (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 $165,000. 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 $6,000 cash and an $8,000 note payable. Depreciation for May will be $500. Prepare a cash budget for Campton Company for the month of May. Campton Company Cash Budget For the Month Ended May 31 Beginning cash balance Cash receipts: Cash sales Collections on credit sales Cash available Cash disbursements: Payments for merchandise Salaries and operating expense payments Principal and interest payment. $ $ $
Prepare Cash Budget from Budgeted Transactions Prepare a cash budget for the month ended May 31. Campton Company anticipates a cash balance of $84,000 on May 1. The following budgeted transactions for May present data related to anticipated cash receipts and cash disbursements: 1. For May, budgeted cash sales are $60,000 and budgeted credit sales are $500,000. (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 $280,000. (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 $165,000. 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 $6,000 cash and an $8,000 note payable. Depreciation for May will be $500. Prepare a cash budget for Campton Company for the month of May. Campton Company Cash Budget For the Month Ended May 31 Beginning cash balance Cash receipts: Cash sales Collections on credit sales Cash available Cash disbursements: Payments for merchandise Salaries and operating expense payments Principal and interest payment. $ $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Transcribed Image Text:Prepare Cash Budget from Budgeted Transactions
Prepare a cash budget for the month ended May 31, Campton Company anticipates a cash balance of $84,000 on May 1. The following budgeted transactions for May present data related
to anticipated cash receipts and cash disbursements:
1. For May, budgeted cash sales are $60,000 and budgeted credit sales are $500,000. (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 $280,000. (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 $165,000.
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 $6,000 cash and an $8,000 note payable. Depreciation for May will be $500.
Prepare a cash budget for Campton Company for the month of May.
Campton Company
Cash Budget
For the Month Ended May 31
Beginning cash balance
Cash receipts:
Cash sales
Collections on credit sales
Cash available
Cash disbursements:
Payments for merchandise.
Salaries and operating expense payments
Principal and interest payment
$
$
Transcribed Image Text:$20,000 income tax deposit is due to the federal government during May.
6. A new delivery truck will be purchased during May for $6,000 cash and an $8,000 note payable. Depreciation for May will be $500.
Prepare a cash budget for Campton Company for the month of May.
Campton Company
Cash Budget
For the Month Ended May 31
Beginning cash balance.
Cash receipts:
Cash sales
Collections on credit sales
Cash available
Cash disbursements:
Payments for merchandise
Salaries and operating expense payments
Principal and interest payment
Income tax deposit
Payment on truck
Total cash disbursements
Ending cash balance
$
$
$
$
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