BUDGETING April ($) May ($) June ($) Sales 120,000 140,000 190,000 Merchandise purchases 75,000 95,000 115,000 Selling
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Question:
BUDGETING
April ($) May ($) June ($)
Sales 120,000 140,000 190,000
Merchandise purchases 75,000 95,000 115,000
Selling and administrative expenses 60,000 60,000 60,000
Sales on credit: 40% are collected in the month of sale
58% in the month following the sale
remaining 2% are uncollectible
Merchandise purchases are paid in full the month following the month of purchase. The selling and administrative expenses above include $7,000 of depreciation on display fixtures and warehouse equipment. Expenses are paid as incurred.
Cash balance to maintain minimum-$18,000
All borrowings are made at month end. The interest rate =2% per month
Can you calculate the cash budget of May ()
expected cash on hand at beginning of may - $34,000
Posted Date: