Castor Incorporated is preparing its master budget. Budgeted sales and cash payments for merchandise purchases for the next three months follow. April $ 30,000 May $ 42,000 June $ 26,000 Budgeted Sales Cash payments for merchandise purchases 24,200 14,800 13,500 Sales are 80% cash and 20% on credit. Sales in March were $26,000. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $14,000 in cash and $4,000 in loans payable. A minimum cash balance of $14,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $12,000. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If a preliminary cash balance above $12,000 at month-end exists, loans are repaid from the excess. Expenses are paid in the month incurred and include sales commissions (10% of sales), shipping (4% of sales), office salaries ($7,000 per month), and rent ($5,000 per month). (a) Prepare a schedule of cash receipts from sales for April, May, and June. (b) Prepare a cash budget for each of April, May, and June. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) June 26,000 $ $ Answer is not complete. CASTOR INCORPORATED Schedule of Cash Receipts from Sales April May $ 30,000 $ 42,000 Cash receipts from Cash sales 24,000 $ 33,600 Collections of prior period salos 5.200 6,000 Total cash receipts $ 29.200 $ 39,600 CASTOR, INCORPORATED Cash Budget April May Beginning cash balance IS 14.000 $ 14,000 Add: Cash receipts from sales 29.200 39,600 20,800 8,400 29,200 $ June $ 14,416 X 29.200 Return to questio June 26,000 $ $ 20,800 8,400 29,200 $ CASTOR INCORPORATED Schedule of Cash Receipts from Sales April May $ 30.000 $ 42.000 Cash receipts from Cash sales OS 24,000 33,600 Collections of prior period sales 5,200 6,000 Total cash receipts 29,200 39,600 CASTOR, INCORPORATED Cash Budget April May Beginning cash balance $ 14,000 $ 14.000 Add: Cash receipts from sales 29,200 39,600 Total cash available 43,200 53,600 Less: Cash payments for: Merchandise 24,200 14,800 Sales commissions 3.000 4,200 Shipping 1,200 1.680 Rent 5,000 5,000 Office salaries 7.000 7,000 Interest on loan 40 152 June $ 14,416 X 29,200 43,616 > OOO OOO 13,500 2,600 1,040 5,000 7,000 0 40,440 29, 140 2,760 14.476 X Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance 32,832 20.768 (15,240) 5.528 0 11,240 14,000 14.476 Loan balance May June $ $ April 4,000 11.240 15,240 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month 15.240 (15,240) 0 0 $ 0 $
