A)

Zen Den reports the following sales forecast: September, $25,000; October $36,000; and November, $30,000. All sales are on account. Collections of credit sales are received as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible. Prepare a schedule of cash receipts for November.

B) T-Mart purchased $100,000 of merchandise in August and expects to purchase $120,000 in September. Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the following month. Compute cash disbursements for merchandise for September.

C) Rockgate Companys July sales budget calls for sales of $400,000. The store expects to begin July with $40,000 of inventory and to end the month with $50,000 of inventory. Gross margin is typically 30% of sales. Determine the budgeted cost of merchandise purchases for July

D) Splinter Company forecasts sales of 6,000 units for April. Beginning inventory is 1,000 units. The desired ending inventory is 30% higher than the beginning inventory. How many units should Splinter purchase in April?

1. E) Use the following information to prepare a cash budget for the month ended on March 31 for Sosa Company. The budget should show expected cash receipts and cash disbursements for the month of March and the balance expected on March 31.

• Beginning cash balance on March 2, $82,000
• Cash receipts from sales, $300,000
• Budgeted cash disbursements for inventory purchases, $120,000
• Budgeted cash disbursements for salaries, $80,000
• Other budgeted cash expenses, $55,000
• Cash repayment of bank loan, $30,000

F) Kaizen Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $8,400 and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) are:

	July	August	September
Cash receipts	$24,000	$32,000	$40,000
Cash disbursement	$28,000	$30,000	$32,000

Prepare a cash budget for July, August, and September. Round interest payments to the nearest whole dollar. Use the form on the following page.

G) What is the ending cash balance for August?

H) What is the ending cash balance for September?