1. eBook

   Cash Budget

   LeeAnn Ortiz owns a retail store that sells new and used sporting equipment. LeeAnn has requested a cash budget for October. After examining the records of the company, you find the following:

   1. Cash balance on October 1 is $1,110.
   2. Actual sales for August and September are as follows:

      		August		September
      Cash sales		$6,000		$4,500
      Credit sales		58,000		61,000
      Total sales		$64,000		$65,500

   3. Credit sales are collected over a three-month period: 40 percent in the month of sale, 36 percent in the next month, and 22 percent in the second month after the sale. The remaining sales are uncollectible.
   4. Inventory purchases average 70 percent of a month's total sales. Of those purchases, 45 percent are paid for in the month of purchase. The remaining 55 percent are paid for in the following month.
   5. Salaries and wages total $3,850 per month.
   6. Rent is $3,150 per month.
   7. Taxes to be paid in October are $1,635.
   8. LeeAnn usually withdraws $3,500 each month as her salary.
   9. Advertising is $1,500 per month.
   10. Other operating expenses total $3,800 per month.
   11. Internet and telephone fees are $320 per month.

   LeeAnn tells you that she expects cash sales of $5,000 and credit sales of $63,000 for October. She likes to have $3,000 on hand at the end of the month and is concerned about the potential October ending balance.

   Required:

   Prepare a cash budget for October. Include supporting schedules for cash collections and cash payments. Round your intermediate computations and final answers to the nearest dollar.

   Wooster Sporting Goods Store Cash Budget For the Month of October

   Beginning cash balance	$fill in the blank 0397b7fe807003f_1
   Collections:
   Cash sales	fill in the blank 0397b7fe807003f_2
   Credit sales:
   October	fill in the blank 0397b7fe807003f_3
   September	fill in the blank 0397b7fe807003f_4
   August	fill in the blank 0397b7fe807003f_5
   Total cash available		$fill in the blank 0397b7fe807003f_6
   Disbursements:
   Inventory purchases:
   October	$fill in the blank 0397b7fe807003f_7
   September	fill in the blank 0397b7fe807003f_8
   Salaries and wages	fill in the blank 0397b7fe807003f_9
   Rent	fill in the blank 0397b7fe807003f_10
   Taxes	fill in the blank 0397b7fe807003f_11
   Other operating expenses	fill in the blank 0397b7fe807003f_12
   Owner withdrawal	fill in the blank 0397b7fe807003f_13
   Advertising	fill in the blank 0397b7fe807003f_14
   Internet and telephone	fill in the blank 0397b7fe807003f_15	fill in the blank 0397b7fe807003f_16
   Ending cash balance		$fill in the blank 0397b7fe807003f_17

   Explain how each of the four data analytic typesdescriptive, diagnostic, predictive, or prescriptivecan be used in LeeAnn's budgeting process. (See Exhibits 2.5 and 2.6, for a review of data analytic types.)

   The cash budget is used both

   descriptively and predictivelydiagnosticly and predictivelypredictively and prescriptivelyprescriptively and descriptively

   to describe what is expected given LeeAnn's assumptions.