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 Cash balance on June 1 is $786 Actual sales for April and May are as follows April May Cash sales $10,000 $18,000 Credit sales 28,900 35,000 Total sales $38,900 $53,000 Credit sales are collected over a 3 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 Inventory purchases average 64 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 Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner Rent is $5,100 per month 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 doesnt have access to short term loans Required 1 Prepare a cash budget for June Include supporting schedules for cash collections and cash payments Round calculations and final answers to the nearest dollar Be sure to enter percentages as whole numbers Conceptual Connection Did the business show a negative cash balance for June YesNo For June Beginning cash balance Collections Cash sales Credit sales Current month 1 Il May credit sales April credit sales Total cash available Less disbursements Inventory purchases Current month Prior month X Salaries and wages llll Rent Taxes Total cash needs Excess of cash available over needs I)

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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

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:

Cash balance on June 1 is $786.
Actual sales for April and May are as follows:

April May

Cash sales $10,000 $18,000

Credit sales 28,900 35,000

Total sales $38,900 $53,000
Credit sales are collected over a 3-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.
Inventory purchases average 64% 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.
Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner.
Rent is $5,100 per month.
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 doesnt have access to short-term loans.

Required:

1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. Round calculations and final answers to the nearest dollar. Be sure to enter percentages as whole numbers.

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Conceptual Connection: Did the business show a negative cash balance for June?

YesNo

For June Beginning cash balance Collections: Cash sales Credit sales: Current month 1 Il % May credit sales % April credit sales Total cash available Less disbursements: Inventory purchases: Current month % Prior month X % Salaries and wages llll Rent Taxes Total cash needs Excess of cash available over needs I)