The following data and information are provided to prepare a cash budget for November-December 2022:1. Budgeted sales for the last 2 months of 2022 are $156,600 (November) and $180,000 (December).2. All sales are credit sales. The company expects to collect 60% of credit sales in the month of thesale and 40% in the month after the sale.3. All necessary merchandise inventories are purchased on account. Purchases are paid 70% in the monthof the purchase and 30% in the following month. Purchases for November-December 2022 areestimated to be $108,000 (November) and $121,000 (December).4. Selling and administrative expenses for November and December are $15,000 and $12,000,respectively, excluding monthly depreciation expense $1,000.5. Equipment will be purchased in December 2022 for $43,000.6. $36,000 bonus will be distributed to shareholders in December 2022.7. Cash balance on November 1st was $8,200.8. The company has a policy to maintain a minimum cash balance of $5,000. If necessary, the companywill borrow to meet its short-term needs. All borrowing is done at the beginning of the month and allpayments on principal and interest are made at the end of the next month. The annual interest rate is9%. The company must borrow in multiples of $1,000.9. October sales were $140,400 and merchandise inventory purchased equal $101,000.Prepare the cash budget for November-December 2022.(No currency needed, no decimal needed, no thousand separators or "unit" needed. Example: the correctanswer is "2000000". If you answer "2.000.000" or "2,000,000.00" or "Rp 2 juta", they all will be consideredwrong. If the answer is zero, answer "0")Total cash disbursement for merchandise inventory purchased in Dec 2022Total cash disbursement for bonus in Dec 2022Total cash disbursement for selling and admin expense in Nov 2022Ending cash balance in Dec 2022Accounts Receivable at 31 Dec 2022

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Prepare the cash budget for November-December 2022.

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

The following data and information are provided to prepare a cash budget for November-December 2022:
1. Budgeted sales for the last 2 months of 2022 are $156,600 (November) and $180,000 (December).
2. All sales are credit sales. The company expects to collect 60% of credit sales in the month of the
sale and 40% in the month after the sale.
3. All necessary merchandise inventories are purchased on account. Purchases are paid 70% in the month
of the purchase and 30% in the following month. Purchases for November-December 2022 are
estimated to be $108,000 (November) and $121,000 (December).
4. Selling and administrative expenses for November and December are $15,000 and $12,000,
respectively, excluding monthly depreciation expense $1,000.
5. Equipment will be purchased in December 2022 for $43,000.
6. $36,000 bonus will be distributed to shareholders in December 2022.
7. Cash balance on November 1st was $8,200.
8. The company has a policy to maintain a minimum cash balance of $5,000. If necessary, the company
will borrow to meet its short-term needs. All borrowing is done at the beginning of the month and all
payments on principal and interest are made at the end of the next month. The annual interest rate is
9%. The company must borrow in multiples of $1,000.
9. October sales were $140,400 and merchandise inventory purchased equal $101,000.
Prepare the cash budget for November-December 2022.
(No currency needed, no decimal needed, no thousand separators or "unit" needed. Example: the correct
answer is "2000000". If you answer "2.000.000" or "2,000,000.00" or "Rp 2 juta", they all will be considered
wrong. If the answer is zero, answer "0")
Total cash disbursement for merchandise inventory purchased in Dec 2022
Total cash disbursement for bonus in Dec 2022
Total cash disbursement for selling and admin expense in Nov 2022
Ending cash balance in Dec 2022
Accounts Receivable at 31 Dec 2022

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