Wellness Products, needs a cash budget for September. The following information is available: 1. The cash balance at the beginning of August is 9,000€. 2. Contribution margin is 50% (COGS are 50% of sales) 3. Actual sales for July and expected sales for August, September and October are as shown below. Some customers pay in cash (Cash sales) and others in account as described in the figure below. Customers that pay in account, make the payment the month after. 4. Purchases of inventory (company just resells what they buy) must be done so that the end of month inventory must cover 20% of next month sales. Initial inventory in July was 5.300€. 100% of a month's inventory purchases are paid for during the month of purchase. 1. Prepare a schedule of expected cash collections for August, September & October. 2. Prepare a merchandise purchases budget for July, August, and September. 3. Prepare a schedule of expected cash flow (cash in minus cash out) for August, and September. Cash Sales Credit Sales Total B I U A A July $6500 $20000 $26500 2 August $5250 $30000 $35250 September $7400 $40000 $47400 October $6000 $35000 $41000

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Wellness Products, needs a cash budget for September. The following information is
available:
1. The cash balance at the beginning of August is 9,000€.
2. Contribution margin is 50% (COGS are 50% of sales)
3. Actual sales for July and expected sales for August, September and October are as
shown below. Some customers pay in cash (Cash sales) and others in account as
described in the figure below. Customers that pay in account, make the payment
the month after.
4. Purchases of inventory (company just resells what they buy) must be done so that the
end of month inventory must cover 20% of next month sales. Initial inventory in July
was 5.300€. 100% of a month's inventory purchases are paid for during the month of
purchase.
1. Prepare a schedule of expected cash collections for August, September & October.
2. Prepare a merchandise purchases budget for July, August, and September.
3.
Prepare a schedule of expected cash flow (cash in minus cash out) for August, and
September.
Cash Sales
Credit Sales
Total
B I U G G
July
$6500
$20000
$26500
August
$5250
$30000
$35250
September
$7400
$40000
$47400
October
$6000
$35000
$41000
Transcribed Image Text:Wellness Products, needs a cash budget for September. The following information is available: 1. The cash balance at the beginning of August is 9,000€. 2. Contribution margin is 50% (COGS are 50% of sales) 3. Actual sales for July and expected sales for August, September and October are as shown below. Some customers pay in cash (Cash sales) and others in account as described in the figure below. Customers that pay in account, make the payment the month after. 4. Purchases of inventory (company just resells what they buy) must be done so that the end of month inventory must cover 20% of next month sales. Initial inventory in July was 5.300€. 100% of a month's inventory purchases are paid for during the month of purchase. 1. Prepare a schedule of expected cash collections for August, September & October. 2. Prepare a merchandise purchases budget for July, August, and September. 3. Prepare a schedule of expected cash flow (cash in minus cash out) for August, and September. Cash Sales Credit Sales Total B I U G G July $6500 $20000 $26500 August $5250 $30000 $35250 September $7400 $40000 $47400 October $6000 $35000 $41000
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