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The owner of a plumbing supply company has requested a cash budget for June. After examining the records of the company, you find the following: a. Cash balance on June 1 is $1,486. b. Actual sales for April and May are as follows: Cash sales Credit sales Total sales April May $10,000 28,900 $18,000 $38,900 35,000 $53,000 c. Credit sales are collected over a 3-month period: 30% in the month of sale, 40% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. d. Inventory purchases average 68% of a month's total sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month. e. Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner f. Rent is $5,200 per month. 9. Taxes to be paid in June are $6,780. The owner also tells you that he expects cash sales of $18,500 and credit sales of $58,000 for June. No minimus cash balance is required. The owner of the company doesn't have access to short-term loans. Required: 1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. Round calculations and final answers to the nearest dollar. Be sure to enter percentages as whole numbers. Cash Budget Beginning cash balance Collections: Cash sales For June ) 18,600 1,486 Show Transcribed Text Cash sales Credit sales: Current month 18,600 ว 58,000 x 17,400 May credit sales 35,000 x 40 % 14,000 April credit sales 5,896 Tetal cash available 57,382 v Less disbursements: Inventory purchases: Current month 20 X x 53,620 X % Prior month Salaries and wages Taxes Total cash needs % 7,250 x 5,000 x Excess of cash available over needs с

The owner of a plumbing supply company has requested a cash budget for June. After examining the records of the company, you find the following: a. Cash balance on June 1 is $1,486. b. Actual sales for April and May are as follows: Cash sales Credit sales Total sales April May $10,000 28,900 $18,000 $38,900 35,000 $53,000 c. Credit sales are collected over a 3-month period: 30% in the month of sale, 40% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. d. Inventory purchases average 68% of a month's total sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month. e. Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner f. Rent is $5,200 per month. 9. Taxes to be paid in June are $6,780. The owner also tells you that he expects cash sales of $18,500 and credit sales of $58,000 for June. No minimus cash balance is required. The owner of the company doesn't have access to short-term loans. Required: 1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. Round calculations and final answers to the nearest dollar. Be sure to enter percentages as whole numbers. Cash Budget Beginning cash balance Collections: Cash sales For June ) 18,600 1,486 Show Transcribed Text Cash sales Credit sales: Current month 18,600 ว 58,000 x 17,400 May credit sales 35,000 x 40 % 14,000 April credit sales 5,896 Tetal cash available 57,382 v Less disbursements: Inventory purchases: Current month 20 X x 53,620 X % Prior month Salaries and wages Taxes Total cash needs % 7,250 x 5,000 x Excess of cash available over needs с

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 45BEB: Pilsner Inc. purchases raw materials on account for use in production. The direct materials...
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The owner of a plumbing supply company has requested a cash budget for June. After examining the records of the company, you find the following: a. Cash balance on June 1 is $1,486. b. Actual sales for April and May are as follows: Cash sales Credit sales Total sales April May $10,000 28,900 $18,000 $38,900 35,000 $53,000 c. Credit sales are collected over a 3-month period: 30% in the month of sale, 40% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. d. Inventory purchases average 68% of a month's total sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month. e. Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner f. Rent is $5,200 per month. 9. Taxes to be paid in June are $6,780. The owner also tells you that he expects cash sales of $18,500 and credit sales of $58,000 for June. No minimus cash balance is required. The owner of the company doesn't have access to short-term loans. Required: 1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. Round calculations and final answers to the nearest dollar. Be sure to enter percentages as whole numbers. Cash Budget Beginning cash balance Collections: Cash sales For June ) 18,600 1,486 Show Transcribed Text Cash sales Credit sales: Current month 18,600 ว 58,000 x 17,400 May credit sales 35,000 x 40 % 14,000 April credit sales 5,896 Tetal cash available 57,382 v Less disbursements: Inventory purchases: Current month 20 X x 53,620 X % Prior month Salaries and wages Taxes Total cash needs % 7,250 x 5,000 x Excess of cash available over needs с
Transcribed Image Text:The owner of a plumbing supply company has requested a cash budget for June. After examining the records of the company, you find the following: a. Cash balance on June 1 is $1,486. b. Actual sales for April and May are as follows: Cash sales Credit sales Total sales April May $10,000 28,900 $18,000 $38,900 35,000 $53,000 c. Credit sales are collected over a 3-month period: 30% in the month of sale, 40% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. d. Inventory purchases average 68% of a month's total sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month. e. Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner f. Rent is $5,200 per month. 9. Taxes to be paid in June are $6,780. The owner also tells you that he expects cash sales of $18,500 and credit sales of $58,000 for June. No minimus cash balance is required. The owner of the company doesn't have access to short-term loans. Required: 1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. Round calculations and final answers to the nearest dollar. Be sure to enter percentages as whole numbers. Cash Budget Beginning cash balance Collections: Cash sales For June ) 18,600 1,486 Show Transcribed Text Cash sales Credit sales: Current month 18,600 ว 58,000 x 17,400 May credit sales 35,000 x 40 % 14,000 April credit sales 5,896 Tetal cash available 57,382 v Less disbursements: Inventory purchases: Current month 20 X x 53,620 X % Prior month Salaries and wages Taxes Total cash needs % 7,250 x 5,000 x Excess of cash available over needs с
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