In the fourth quarter of 2020, Casey Wholesalers had the following net income: Sales.....................................................$650,000 Less cost of
Question:
In the fourth quarter of 2020, Casey Wholesalers had the following net income:
Sales.....................................................$650,000
Less cost of sales..................................300,000
Gross margin........................................350,000
Selling and administration..................250,000
Income before taxes............................100,000
Taxes on income....................................20,000
Net income..........................................$ 80,000
Purchases in the fourth quarter amounted to $375,000.
Estimated data for Casey Wholesalers, Inc. for 2021 are as follows:
Taxes are 20 percent of pretax income and are paid in the quarter incurred. Sixty percent of sales are collected in the quarter of sale and 40 percent are collected in the next quarter. Eighty percent of purchases are paid in the quarter of purchase and 20 percent are paid in the next quarter. Selling and administrative expenses are paid in the quarter incurred except for $10,000 of depreciation included in selling and administrative expense. A capital expenditure for $75,000 is planned for the fourth quarter of 2021.
Required
Prepare a cash budget for each quarter of 2021.
Step by Step Answer:
Casey Wholesalers Cash Budget for the Year 2021 Cash receipts Collection of credit sales Collection ...View the full answer
