Required information KAB Inc., a small retail store, had the following results for May. The budgets for June and July are also given. Sales Cost of sales Gross margin Operating expenses Operating income May (actual) $45,000 $20,000 $25,000 $19,000 $5,000 June (budget) $46,000 $21.000 $21,000 $19,000 $1,000 July (budget) $49,000 $23,500 $21,500 $19,000 $1,500 Sales are collected 75% in the month of the sale and the balance in the month following the sale. (There are no bad debts.) The goods that are sold are purchased in the month prior to sale. Suppliers of the goods are paid in the month following the purchase. The operating expenses are paid in the month of the sale.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question

Please do not give solution in image format thanku 

Required information
KAB Inc., a small retail store, had the following results for May. The budgets for June and July are also given.
Sales
Cost of sales
Gross margin
Operating
expenses
Operating income
May (actual)
$45,000
$20,000
$25,000
$19,000
$5,000
June (budget)
$46,000
$21,000
$21,000
$19,000
$1,000
July (budget)
$49,000
$23,500
$21,500
$19,000
$1,500
Sales are collected 75% in the month of the sale and the balance in the month following the sale. (There are no bad
debts.) The goods that are sold are purchased in the month prior to sale. Suppliers of the goods are paid in the month
following the purchase. The operating expenses are paid in the month of the sale.
part 2:
What should be the amount of cash collected during the month of June?
What should be the cash disbursements during the month of June for goods purchased for resale and for operating expenses?
Transcribed Image Text:Required information KAB Inc., a small retail store, had the following results for May. The budgets for June and July are also given. Sales Cost of sales Gross margin Operating expenses Operating income May (actual) $45,000 $20,000 $25,000 $19,000 $5,000 June (budget) $46,000 $21,000 $21,000 $19,000 $1,000 July (budget) $49,000 $23,500 $21,500 $19,000 $1,500 Sales are collected 75% in the month of the sale and the balance in the month following the sale. (There are no bad debts.) The goods that are sold are purchased in the month prior to sale. Suppliers of the goods are paid in the month following the purchase. The operating expenses are paid in the month of the sale. part 2: What should be the amount of cash collected during the month of June? What should be the cash disbursements during the month of June for goods purchased for resale and for operating expenses?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education