Cash Budget

The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the

following:

a$.$ Cash balance on June $1$ is $$1,186.$

b$.$ Actual sales for April and May are as follows:

c$.$ Credit sales are collected over a three$-$month period: $40\%$ in the month of sale, $30\%$ in the second month, and $20\%$ in the third

month. The sales collected in the third month are subject to a $2\%$ late fee, which is paid by those customers in addition to what they

owe. The remaining sales are uncollectible.

d$.$ Inventory purchases average $72\%$ of a month's total sales. Of those purchases, $20\%$ are paid for in the month of purchase. The

remaining $80\%$ are paid for in the following month.

e$.$ Salaries and wages total $$11,750$ per month, including a $$4,500$ salary paid to the owner.

f$.$ Rent is $$4,900$ per month.

g$.$ Taxes to be paid in June are $$6,780.$

The owner also tells you that he expects cash sales of $$18,600$ and credit sales of $$54,000$ for June. No minimum cash balance is

required. The owner of the company doesn't have access to short$-$term loans.

Required: Required:

Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. Round calculations and final

answers to the nearest dollar. If required, use the minus sign to indicated a cash deficiency.

Cash Budget

For June Less disbursements:

Inventory purchases:

Current month

Total cash needs

Excess $($deficiency$)$ of cash available over needs