Data table

December 31, 2023, account balances:
Cash		$32,000
Accounts Receivable		20,000
Merchandise Inventory		20,000
Accounts Payable		15,000
Salaries and Commissions Payable		2,800
Budgeted amounts for 2024:	January	February
Sales, all on account	$85,000	$85,300
Purchases, all on account	40,500	41,000
Commissions Expense	4,250	4,265
Salaries Expense	7,000	7,000
Rent Expense	3,000	3,000
Depreciation Expense	500	500
Insurance Expense	200	200
Income Tax Expense	1,900	1,900

Requirement 1. Prepare the schedule of cash receipts from customers for

January

and

February

2024.

Assume cash receipts are

80%

in the month of the sale and

20%

in the month following the sale.

Watercooler Company

Budgeted Cash Receipts from Customers

Two Months Ended February 28, 2024

	January
Current month sales, 80%
Prior month sales, 20%
Total cash receipts

February

Part 2

Requirement 2. Prepare the schedule of cash payments for purchases for

January

and

February

2024.

Assume purchases are paid

30%

in the month of purchase and

70%

in the month following the purchase.

Watercooler Company

Budgeted Cash Payments for Purchases

Two Months Ended February 28, 2024

	January
70% of last month's purchases
30% of current month's purchases
Total cash payments for purchases

February

Part 3

Requirement 3. Prepare the schedule of cash payments for selling and administrative expenses for

January

and

February

2024.

Assume

40%

of the accrual for Salaries and Commissions Payable is for commissions and

60%

is for salaries. The

December

31

balance will be paid in

January.

Salaries and commissions are paid

60%

in the month incurred and

40%

in the following month. Rent and income tax expenses are paid as incurred. Insurance expense is an expiration of the prepaid amount. (Round your answers to the nearest whole number.)

Watercooler Company
Budgeted Cash Payments for Selling and Administrative Expenses
Two Months Ended February 28, 2024
		January	February
	Variable expenses:
	40% of last month's Commission Expense
	60% of current month's Commission Expense
	Total payments for variable expenses
	Fixed expenses
	40% of last month's Salaries Expense
	60% of current month's Salaries Expense
	Rent expense
	Total payments for fixed expenses
	Total payments for S and A expenses

Part 4

Requirement 4. Prepare the cash budget for

January

and

February

2024.

Assume no financing took place.

Watercooler Company

Cash Budget

Two Months Ended February 28, 2024

	January	February
Beginning cash balance
Cash receipts from customers
Cash available
Cash payments:
Purchases of merchandise inventory
Selling and administrative expenses
Payments for income taxes
Total cash payments
Ending cash balance