Cash Budget

LeeAnn Ortiz owns a retail store that sells new and used sporting equipment. LeeAnn has requested a cash budget for October. After

examining the records of the company, you find the following:

a$.$ Cash balance on October $1$ is $$1,110.$

b$.$ Actual sales for August and September are as follows:

c$.$ 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.

d$.$ Inventory purchases average $70$ percent of a month's 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.

e$.$ Salaries and wages total $$3,850$ per month.

f$.$ Rent is $$3,150$ per month.

g$.$ Taxes to be paid in October are $$1,635.$

h$.$ LeeAnn usually withdraws $$3,500$ each month as her salary.

i$.$ Advertising is $$1,500$ per month.

j$.$ Other operating expenses total $$3,800$ per month.

k$.$ Internet and telephone fees are $$340$ per month.

LeeAnn tells you that she expects cash sales of $$5,000$ and credit sales of $$63,000$ 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 $

Collections:

Cash sales

Credit sales:

October

September

August

Total cash available

Disbursements:

Inventory purchases:

October

September

Salaries and wages

Rent

Taxes

Other operating expenses

Owner withdrawal

Advertising

Internet and telephone

Ending cash balance