Brutus Company's budgeted income statement reects the following amounts: Sales Purchases Expense January $120,000 $78,000 $24,000 February
Question:
Brutus Company's budgeted income statement reects the following amounts:
Sales | Purchases | Expense | |
January | $120,000 | $78,000 | $24,000 |
February | 110,000 | 66,000 | 24,200 |
March | 125,000 | 81,250 | 27,000 |
April | 130,000 | 84,500 | 28,600 |
Sales are collected 50% in the month of sale, 30% in the month following sale, and 19% in the second month following sale. One percent of sales is uncollectible and expensed at the end of the year. Brutus pays for all purchases in the month following purchase and takes advantage of a 3% discount. The following balances are as of January 1:
Cash | $88,000 |
Accounts receivable* | 58,000 |
Accounts payable | 72,000 |
*Of this balance, $35,000 will be collected in January and the remaining amount will be collected in February.
The monthly expense gures include $5,000 of depreciation. The expenses are paid in the month incurred.
Brutus's budgeted cash payments in February are: