Cash Budget, Pro Forma Balance Sheet

Bernard Creighton is the controller for Creighton Hardware Store. In putting together the cash budget for the fourth quarter of the year, he has assembled the following data.

Arizona Western College | Your C X CengageNOWv2 | Online teachin X + X https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i... Chapter 9 eBook Print Item Cash Budget, Pro Forma Balance Sheet ? Bernard Creighton is the controller for Creighton Hardware Store. In putting together the cash budget for the fourth quarter of the year, he has assembled the following data. a. Sales July (actual) $100,000 August (actual) 120,000 September (estimated) 90,000 October (estimated) 100,000 November (estimated) 135,000 December (estimated) 150,000 b. Each month, 20 percent of sales are for cash, and 80 percent are on credit. The collection pattern for credit sales is 20 percent in the month of sale, 50 percent in the following month, and 30 percent in the second month following the sale. c. Each month, the ending inventory exactly equals 40 percent of the cost of next month's sales. The markup on goods is 33.33 percent of cost. d. Inventory purchases are paid for in the month following purchase. e. Recurring monthly expenses are as follows: Salaries and wages $10,000 Depreciation on plant and equipment 4,000 Utilities 1,000 Other 1,700 f. Property taxes of $15,000 are due and payable on September 15. g. Advertising fees of $6,000 must be paid on October 20. h. A lease on a new storage facility is scheduled to begin on November 2. Monthly payments are $5,000. i. The company has a policy to maintain a minimum cash balance of $10,000. If necessary, it will borrow to meet its short-term needs. All borrowing is done at the beginning of the month. All Check My Work