Jilly Company imports gift items from overseas and sells them to gift shops and department stores throughout the United States. Jilly Company provided the following information:

a. The October 31 balance in the cash account is $53,817.

b. All sales are on account. Sales in September were $900,000 and in October were

$1,300,000.

c. November sales are expected to be $2,750,000.

d. In Jilly’s experience, 60 percent of sales are collected in the month of sale and 35 percent are collected in the month following sale. The remaining credit sales are uncollectible.

e. Jilly purchases all merchandise on account. Purchases in September were $800,000 and in October were $950,000. November purchases are expected to be

Required:
1. Prepare a cash budget for Jilly Company for the month of November.
2. What if Jilly faced a customs duty and shipping percentage of 25 percent? How would that affect the November cash budget?LO1

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$2,750,000 as Jilly prepares for the Christmas buying season. Twenty-five percent of purchases are paid in the month of purchase, while the remainder is paid in the month following the purchase month. f. Jilly Company has five employees who are paid a total of $34,500 per month. Due to timing issues, about 90 percent of total wages are paid in the month carned and the remaining 10 percent are paid in the following month. g. Rent for office and warehouse space is $15,600 paid monthly in cash. h. Utilities average $7,650 per month and are paid in cash. i. In November, Jilly expects to pay employment taxes of $4,760. j. Since Jilly imports product from overseas, customs duty and shipping to the central location of 20 percent of current monthly purchase cost must be paid in the month of purchase. k. Other cash expenses for November are expected to be $37,400.