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Cash Budget Janet Wooster owns a retail store that sells new and used sporting equipment. Janet has requested a cash budget for October. After examining

Cash Budget

Janet Wooster owns a retail store that sells new and used sporting equipment. Janet has requested a cash budget for October. After examining the records of the company, you find the following:

  1. Cash balance on October 1 is $1,120.
  2. Actual sales for August and September are as follows:
    August September
    Cash sales $6,000 $4,500
    Credit sales 58,000 62,000
    Total sales $64,000 $66,500
  3. Credit sales are collected over a three-month period: 40 percent in the month of sale, 36 percent in the next month, and 22 percent in the second month after the sale. The remaining sales are uncollectible.
  4. Inventory purchases average 70 percent of a months total sales. Of those purchases, 45 percent are paid for in the month of purchase. The remaining 55 percent are paid for in the following month.
  5. Salaries and wages total $3,850 per month.
  6. Rent is $3,150 per month.
  7. Taxes to be paid in October are $1,635.
  8. Janet usually withdraws $3,500 each month as her salary.
  9. Advertising is $1,500 per month.
  10. Other operating expenses total $3,800 per month.
  11. Internet and telephone fees are $320 per month.

Janet tells you that she expects cash sales of $5,000 and credit sales of $64,000 for October. She likes to have $3,000 on hand at the end of the month and is concerned about the potential October ending balance.

Required:

Prepare a cash budget for October. Include supporting schedules for cash collections and cash payments. Round your intermediate computations and final answers to the nearest dollar.

Wooster Sporting Goods Store
Cash Budget
For the Month of October
Beginning cash balance $ blank
Collections: blank
Cash sales blank
Credit sales: blank
October blank
September blank
August blank
Total cash available blank $
Disbursements: blank blank
Inventory purchases: blank blank
October $ blank
September blank
Salaries and wages blank
Rent blank
Taxes blank
Other operating expenses blank
Owner withdrawal blank
Advertising blank
Internet and telephone
Ending cash balance blank $

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