The Francine Company, a merchandising firm, has planned the following sales for the next four months:MarchAprilMayJuneTotal budgeted sales,50,00070,00090,00060,000Sales are made 40% for cash and 60% on account. From experience, the company has learned that a month'ssales on account are collected according to the following pattern:Month of sale70%First month following month of sale20%Second month following month of sale8%Uncollectible2% The company requires a minimum cash balance of $4,000 to start a month.Required:A. Compute the budgeted cash receipts for June.B. Assume the following budgeted data for June:Purchases.P52,000Selling and administrative expenses.10,000Depreciation.8,000Equipment purchases.15,000Cash balance, beginning of June.6,000Using this data, along with your answer to part (1) above, prepare a cash budget in good form for June.Clearly show any borrowing needed during the month. The company can borrow in any dollar amount, butwill not pay any interest until the following month.

A cash budget is a company's estimation of cash inflows and outflows over a specific period of time,…

Using this data, along with your answer to part (1) above, prepare a cash budget in good form for June. Clearly show any borrowing needed during the month. The company can borrow in any dollar amount, but will not pay any interest until the following month.

Using this data, along with your answer to part (1) above, prepare a cash budget in good form for June. Clearly show any borrowing needed during the month. The company can borrow in any dollar amount, but will not pay any interest until the following month.

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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