Todd Enterprises is preparing a cash budget for the second quarter of the coming year. The following data have been forecasted: Sales ....... Merchandise purchases Operating expenses: Payroll. Advertising Rent.... Depreciation. End of April balances: Cash.... Bank loan payable April May $150,000 $157,500 107,000 112,400 13,600 5,400 2,500 7,500 30,000 26,000 14,280 5,700 2,500 7,500 Additional data: (1) Sales are 40% cash and 60% credit. The collection pattern for credit sales is 50% in the month following the sale and 50% in the month thereafter. Total sales in March were $125,000. (2) Purchases are all on credit, with 40% paid in the month of purchase and 60% paid in the following month. (3) Operating expenses are paid in the month they are incurred. (4) A minimum cash balance of $25,000 is required at the end of each month. (5) Loans are used to maintain the minimum cash balance. At the end of each month, interest of 1% per month is paid on the outstanding loan balance as of the beginning of the month. Repayments are made at the end of the month if the cash balance exceeds $25,000. Prepare the company's cash budget for May. Show the ending loan balance at May 31.

Todd Enterprises is preparing a cash budget for the second quarter of the coming year. The following data have been forecasted: Sales ....... Merchandise purchases Operating expenses: Payroll. Advertising Rent.... Depreciation. End of April balances: Cash.... Bank loan payable April May $150,000 $157,500 107,000 112,400 13,600 5,400 2,500 7,500 30,000 26,000 14,280 5,700 2,500 7,500 Additional data: (1) Sales are 40% cash and 60% credit. The collection pattern for credit sales is 50% in the month following the sale and 50% in the month thereafter. Total sales in March were $125,000. (2) Purchases are all on credit, with 40% paid in the month of purchase and 60% paid in the following month. (3) Operating expenses are paid in the month they are incurred. (4) A minimum cash balance of $25,000 is required at the end of each month. (5) Loans are used to maintain the minimum cash balance. At the end of each month, interest of 1% per month is paid on the outstanding loan balance as of the beginning of the month. Repayments are made at the end of the month if the cash balance exceeds $25,000. Prepare the company's cash budget for May. Show the ending loan balance at May 31.

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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Complete your calculations by filling in the highlighted cells. Discuss your observations about the way cash is collected if the company needs $150,000 per month for expenses.
Determine the anticipated total cash receipts for the month of January for Madison Co. in preparing a Cash Budget, given the following info: Accounts Receivable balance as of January 1 $296,000.00 Budgeted Sales for January = $860,000.00 Madison Co. assumes all monthly sales are on account. And that 75% of the sales on account will be collected in the month of the sale, and that the remainder will be collected the following month. $688,000.00 $812,000.00 $941,000.00 O $468,000.00