repare a cash budget for Campton Company for the month of May 2019.
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.
Prepare a
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.
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 | Answer | |
Cash receipts: | ||
Cash sales | Answer | |
Collections on credit sales | Answer | |
Cash available | Answer | |
Cash disbursements: | ||
Payments for merchandise | Answer | |
Salaries and operating expense payments | Answer | |
Principal and interest payment | Answer | |
Income tax deposit | Answer | |
Payment on truck | Answer | |
Total cash disbursements | Answer | |
Ending cash balance | Answer |

Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images









