Q3. The Alex ple, a merchandising firm, has planned the following sales for the next four months: March $50000 April $70000 May $90000 June S60000 Total budget sales Sales are made 40% for cash and 60% on account. From experience, the company has leamed that a month's sales on account are collected 70% in the month of sale, 20% in the first month following sale, 8% in the second month following sale and 2 % in uncollected. Assume the following budgeted data for June also occurred in cash: | $52000 $10000 |Purchases Selling and administrative expenses Depreciation Equipment purchase | Cash balance, beginning of June $8000 $15000 $6000 Using this data above, prepare a cash budget for the month of June. The company requires a minimum cash balance of $4,000 to start a month. Clearly show any borrowing needed during the month in the budget. No interest will be paid for the loan taken (Show all the calculations).
Q3. The Alex ple, a merchandising firm, has planned the following sales for the next four months: March $50000 April $70000 May $90000 June S60000 Total budget sales Sales are made 40% for cash and 60% on account. From experience, the company has leamed that a month's sales on account are collected 70% in the month of sale, 20% in the first month following sale, 8% in the second month following sale and 2 % in uncollected. Assume the following budgeted data for June also occurred in cash: | $52000 $10000 |Purchases Selling and administrative expenses Depreciation Equipment purchase | Cash balance, beginning of June $8000 $15000 $6000 Using this data above, prepare a cash budget for the month of June. The company requires a minimum cash balance of $4,000 to start a month. Clearly show any borrowing needed during the month in the budget. No interest will be paid for the loan taken (Show all the calculations).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:Q3.
The Alex ple, a merchandising firm, has planned the following sales for the next four months:
March
$50000
|May
June
Total budget
sales
April
$70000
$90000
$60000
Sales are made 40% for cash and 60% on account. From experience, the company has learmed
that a month's sales on account are collected 70% in the month of sale, 20% in the first month
following sale, 8% in the second month following sale and 2 % in uncollected.
Assume the following budgeted data for June also occurred in cash:
Purchases
Selling and administrative expenses
Depreciation
Equipment purchase
Cash balance, beginning of June
$52000
$10000
$8000
$15000
| $6000
Using this data above, prepare a cash budget for the month of June. The company requires a
minimum cash balance of $4,000 to start a month. Clearly show any borrowing needed during
the month in the budget. No interest will be paid for the loan taken (Show all the calculations).
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images

Recommended textbooks for you


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON

Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education