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9.21 The following information is available from the financial records of Pascoe Ltd: Sales Purchases April $360 000 $210 000 May 330 000 240 000
9.21 The following information is available from the financial records of Pascoe Ltd:
Sales
Purchases
April
$360 000
$210 000
May
330 000
240 000
June
300 000
180 000
July
390 000
270 000
- Receipts from customers are normally 60 per cent in the month of sale, 30 per cent in the month following the sale, and 8 per cent in the second month following the sale. The balance is expected to be uncollectable.
- Pascoe takes full advantage of the 2 per cent discount allowed on purchases paid for by the 10th day of the following month.
- Purchases for August are budgeted at $600 000, and sales for August are forecast at $660 000.
- Cash payments for expenses (other than purchases) are expected to be $144 000 for the month of August.
- Pascoe's cash balance on 1 August was $220 000.
Required:
Prepare a cash budget for Pascoe for August that includes:
- expected cash receipts during August
- expected cash payments during August
- expected cash balance on 31 August.
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