Check my work Problem 20-6AA Merchandising: Preparation of cash budgets (for three periods) LO P4 During the last week of August, Oneida Company's owner approaches the bank for a $109,000 loan to be made on September 2 and repaid on November 30 with annual interest of 11%, for an interest cost of $2,998. The owner plans to increase the store's inventory by $60,000 during September and needs the loan to pay for inventory acquisitions. The bank's loan officer needs more information about Oneida's ability to repay the loan and asks the owner to forecast the store's November 30 cash position. On September 1, Oneida is expected to have a $4,000 cash balance. $138,700 of net accounts receivable, and $100,000 of accounts payable. Its budgeted sales, merchandise purchases, and various cash payments for the next three months follow. Budgeted Figures Sales Merchandise purchases Cash payments September $ 250,000 October $405,000 November $440,000 220,000 215,000 194,000 19,700 22,150 24,700 12,000 12,000 12,000 Other cash expenses 33,900 28,800 21,050 Repayment of bank loan Interest on the bank loan 109,000 2,998 Payroll Rent "Operations began in August. August sales were $190,000 and purchases were $120,000 The budgeted September merchandise purchases include the inventory increase. All sales are on account. The company predicts that 27% of credit sales is collected in the month of the sale, 44% in the month following the sale, 22% in the second month, 6% in the third, and the remainder is uncollectible. Applying these percents to the August credit sales, for example, shows that $83,600 of the $190,000 will be collected in September, $41,800 in October, and $11,400 in November. All merchandise is purchased on credit: 40% merchandise purchases, and various cash payments for the next three months follow. Budgeted Figures Sales September October $ 250,000 $405,000 Merchandise purchases Cash payments Payroll Rent Other cash expenses: Repayment of bank loan Interest on the bank loan November $440,000 220,000 215,000 194,000 19,700 22,150 24,700 12,000 12,000 12,000 33,900 28,800 21,050 109,000 2,998 "Operations began in August; August sales were $190,000 and purchases were $120,000. The budgeted September merchandise purchases include the inventory increase. All sales are on account. The company predicts that 27% of credit sales is collected in the month of the sale, 44% in the month following the sale, 22% in the second month, 6% in the third, and the remainder is uncollectible. Applying these percents to the August credit sales, for example, shows that $83,600 of the $190,000 will be collected in September, $41,800 in October, and $11,400 in November. All merchandise is purchased on credit: 40% of the balance is paid in the month following a purchase, and the remaining 60% is paid in the second month. For example, of the $120,000 August purchases. $48,000 will be paid in September and $72,000 in October Required: Prepare a cash budget for September, October, and November Required: Prepare a cash budget for September, October, and November. Complete this question by entering your answers in the tabs below. Calculation Cash Budget Prepare the calculation of cash receipts from sales and calculation of cash payments for merchandise. Calculation of cash receipts from sales Collected in Total Sales Uncollectible August September October November 30. November Accounts Rec. Credit sales from August $ 190,000 September October November 250,000 405,000 440,000 Totals $1,285,000 Credit sales from: Collected in- November 30. Total Sales Uncollectible August September October November Accounts Rec. August September $ 190,000 250,000 October 405,000 November 440,000 Totals $1,285,000 Total Purchases Purchases from August $ 120.000 September 220,000 October 215,000 November 194,000 Totals $749,000 Calculation of cash payments for merchandise Paid in- November 30. August September October November Accounts Pay. $ Calculation Cash Budget Prepare a cash budget for September, October, and November. (Round your final answers to the nearest whole dollar.) ONEIDA COMPANY Cash Budget For September, October, and November Beginning cash balance Cash receipts Total cash available Cash payments September October November $ 4,000 Beginning cash balance Cash receipts Total cash available Cash payments Total cash payments Ending cash balance For September, October, and November September October November $ 4,000