1) Llewellin Co. budgeted the following cash receipts and cash disbursements for the first three months of next year. According to a credit agreement with the company's bank, Llewellin promises to have a minimum cash balance of $20,000 at each month-end. In return, the bank has agreed that the company can borrow up to $160,000 at an annual interest rate of 12%, paid on the last day of each month. The company has a cash balance of $20,000 and a loan balance of $40,000 at January 1. Prepare monthly cash budgets for each of the first three months of next year. 2) Use the following information to prepare the July cash budget for Anker Co. It should show expected cash receipts and cash disbursements for the month and the cash balance expected on July 31. a. Beginning cash balance on July 1: $63,000. b. Cash receipts from sales: 30% is collected in the month of sale, 50% in the next month, and 20% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual), \$1,700,000; June (actual), \$1,200,000; and July (budgeted), \$1,400,000. c. Payments on merchandise purchases: 90% in the month of purchase and 10% in the month following purchase. Purchases amounts are: June (actual, \$620,000; and July (budgeted), $790,000. d. Budgeted cash disbursements for salaries in July: $220,000. e. Budgeted depreciation expense for July: $11,000. f. Other cash expenses budgeted for July: $230,000. g. Accrued income taxes due in July : $50,000. h. Bank loan interest due in July: $7,000. Check: Ending cash balance, $143,000 1) Llewellin Co. budgeted the following cash receipts and cash disbursements for the first three months of next year. According to a credit agreement with the company's bank, Llewellin promises to have a minimum cash balance of $20,000 at each month-end. In return, the bank has agreed that the company can borrow up to $160,000 at an annual interest rate of 12%, paid on the last day of each month. The company has a cash balance of $20,000 and a loan balance of $40,000 at January 1. Prepare monthly cash budgets for each of the first three months of next year. 2) Use the following information to prepare the July cash budget for Anker Co. It should show expected cash receipts and cash disbursements for the month and the cash balance expected on July 31. a. Beginning cash balance on July 1: $63,000. b. Cash receipts from sales: 30% is collected in the month of sale, 50% in the next month, and 20% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual), \$1,700,000; June (actual), \$1,200,000; and July (budgeted), \$1,400,000. c. Payments on merchandise purchases: 90% in the month of purchase and 10% in the month following purchase. Purchases amounts are: June (actual, \$620,000; and July (budgeted), $790,000. d. Budgeted cash disbursements for salaries in July: $220,000. e. Budgeted depreciation expense for July: $11,000. f. Other cash expenses budgeted for July: $230,000. g. Accrued income taxes due in July : $50,000. h. Bank loan interest due in July: $7,000. Check: Ending cash balance, $143,000
