Castor Incorporated is preparing its master budget. Budgeted sales and cash payments for merchandise purchases for the next three months follow Budgeted April May June Sales $ 31,000 $ 41,000 $ 25,000 Cash payments for merchandise purchases 22,200 15,800 16,200 Sales are 70% cash and 30% on credit: Sales in March were $25,000. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $13,000 in cash and $3,000 in loans payable. A minimum cash balance of $13,000 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 repald from the excess Expenses are paid in the month incurred and include sales commissions (10% of sales), shipping (2% of sales), office salaries ($6,000 per month), and rent ($4,000 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.) Answer is not complete. CASTOR INCORPORATED Schedule of Cash Receipts from Sales April May $ 31,000 $ 41,000 June $ 25,000 $ Cash receipts from Cash sales Cash sales Total cash receipts 28,700 9,300 38,000 17,500 12,300 29,800 $ $ 21,700 $ 7,500 $ 29,200 CASTOR, INCORPORATED Cash Budget April 13,000 $ 29,200 42,200 June May 13,000 38,000 51,000 13,000 $ 29,800 42,800 Beginning cash balance Add: Cash receipts from sales Total cash available Less: Cash payments for: Merchandise Sales commissions Shipping Office salaries Rent Interest on loan 22,200 3.100 15,800 4,100 >> 620 820 16,200 2,500 500 6,000 4,000 6,000 4,000 30 6,000 4,000 92 20 35,950 29,220 Total cash payments Preliminary cash balance 30,812 20 188 6.850 x 13 5AOX Check my work mode: This shows what is correct or incorrect for the work you have $ $ 13,000 29,200 42,200 13,000 $ 38,000 13,000 X 29,800 42,800 51,000 Beginning cash balance Add: Cash receipts from sales Total cash available Less: Cash payments for: Merchandise Sales commissions Shipping Office salaries 15,800 4,100 16,200 2,500 820 22,200 3,100 620 6,000 4,000 30 500 6,000 4,000 6,000 4,000 92 X Rent Interest on loan 20 35,950 Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance 6,850 X 6,150 13,000 30,812 20,188 % (7,188) 13,000 29,220 13,580 % (580) 13,000 Loan balance April May June Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month 3,000 $ 6,150 X 9,150 9,150 (7,188) 1962 (580) (580) $ $
