Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cash Budget Khloe Company imports gift items from overseas and sells them to gift shops and department stores throughout the United States. Khloe Company provided

Cash Budget
Khloe Company imports gift items from overseas and sells them to gift shops and department stores throughout the United States. Khloe
Company provided the following information:
a. The October 31 balance in the cash account is $53,817.
b. All sales are on account. Sales in September were $950,000 and in October were $1,240,000.
c. November sales are expected to be $2,145,000.
d. In Khloe's experience, 70 percent of sales are collected in the month of sale and 28 percent are collected in the month following sale. The remaining credit sales are uncollectible.
e. Khloe purchases all merchandise on account. Purchases in September were $750,000 and in October were $980,000. November purchases are expected to be $2,000,000 as Khloe prepares for the Christmas buying season. Fifteen percent of purchases are paid in the month of purchase, while the remainder is paid in the month following the purchase month.
f. Khloe Company has nine employees who are paid a total of $48,000 per month. Due to timing issues, about 90 percent of total wages are paid in the month earned and the remaining 10 percent are paid in the following month.
g. Rent for office and warehouse space is $12,300 paid monthly in cash.
h. Utilities average $6,100 per month and are paid in cash.
i. In November, Khloe expects to pay employment taxes of $6,625.
j. Since Khloe imports product from overseas, customs duty and shipping to the central location of 30 percent of current monthly purchase cost must be paid in the month of purchase.
k. Other cash expenses for November are expected to be $41,500.
Required:
Prepare a cash budget for Khloe Company for the month of November.
Khloe Company
Cash Budget
Foif the Month of November
Cash Budget
For the Month of November
Beginning balance, cash account
Received on account from sales in:
October
November
Total cash available
Disbursements:
Payments for purchases made in:
October
November
Salaries paid for work in:
October
November
Rent
Utilities
Employment taxes
Customs duty and shipping
Other cash expenses
Total disbursements
Ending cash balance
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Performance Auditing Measuring Inputs, Outputs, And Outcomes

Authors: Stephen L. Morgan, Ronell B. Raaum, Colleen G. Waring

3rd Edition

0894139762, 9780894139765

More Books

Students also viewed these Accounting questions

Question

Identify ways that country culture influences global business.

Answered: 1 week ago

Question

Define human resource ethics.

Answered: 1 week ago

Question

Describe the human resource management profession.

Answered: 1 week ago