Cash Budget

The Peoria Supply Company sells for $30 one product that it purchases for $20. Budgeted sales in total dollars for next year are $720,000. The sales information needed for preparing the July budget follows:

Month	Sales Revenue
May	$30,000
June	43,000
July	48,000
August	50,000

Account balances at July 1 include these:

Cash	$20,000
Merchandise inventory	17,000
Accounts receivable (sales)	22,000
Accounts payable (purchases)	14,000

The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 50 percent of the budgeted sales in units for the next month. A 2 percent cash discount on sales is allowed if payment is made during the month of sale. Experience indicates that 50 percent of the billings will be collected during the month of sale, 40 percent in the following month, 7 percent in the second following month, and 3 percent will be uncollectible. Total budgeted selling and administrative expenses (excluding bad debts) for the fiscal year are estimated at $192,000 , of which one-half is fixed expense (inclusive of a $20,000 annual depreciation charge). Fixed expenses are incurred evenly during the year. The other selling and administrative expenses vary with sales. Expenses are paid during the month incurred. (Round your answers to the nearest whole number.)

(a) Prepare a schedule of estimated cash collections for July.

Peoria Supply Company Schedule of Cash Collections For the Month of July
Current month's sales	$Answer
Previous month's sales	$Answer
Two months' prior sales	$Answer
Total cash collections	$Answer

(b) Prepare a schedule of estimated July cash payments for purchases.

Peoria Supply Company Schedule of Cash Payments for Purchases For the Month of July
Current month's purchases	$Answer
Beginning accounts payable	Answer
Total cash payments	$Answer

(c) Prepare schedules of July selling and administrative expenses, separately identifying those requiring cash disbursements.

Peoria Supply Company Schedule of Selling and Administrative Expenses and Cash Disbursements For the Month of July
	Total	Cash
Selling and administrative expenses:
Fixed	$Answer
Cash payment		$Answer
Variable	Answer	Answer
Total expenses and cash disbursements	$Answer	$Answer

(d) Prepare a cash budget in summary form for July.

Do not use negative signs with any answers below.

Peoria Supply Company Cash Budget For the Month of July
Cash receipts		$Answer
Cash disbursements:
Merchandise	$Answer
Selling and administrative	Answer	Answer
Excess receipts (disbursements)		$Answer