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Cross Co is preparing a cash budget for July. The following estimates were made : a. expected cash balance , July 1, $5,000. b. income

Cross Co is preparing a cash budget for July. The following estimates were made :

a. expected cash balance , July 1, $5,000.

b. income tax rate is 40%, based on accounting infomce for the month, payable in the following month.

c. Cross Co's customers pay for 50% of their purchases during the month of purchases and the balance during the following month . Bad debt expected to be 2%.

d. merchandise is purchased on account for resale, with 25% of purchases paid for during the month of purchase and the balance paid during the following month.

e. marketing and administrative expenses are all paid in the current month.

f. dividends of $15,000 are expected to be declared and paid during JUly.

g. Cross Co's desire is to have a minimum month end cash balance of $5,000.

h. other budget include the following estimates :

June July

sales (all on account). $30,000 $40,000

purchases $10,000 $15,000

depreciation for marketing and administrative $5,000 $6,000

cost of goods sold $12,000 $16,000

other marketing and administrative expenses $9,000 $10,000

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