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.

$9.$ 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

For the Month of November

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