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Cash Budget

The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following:

Cash balance on June 1 is $1,436.

Actual sales for April and May are as follows:

	April		May
Cash sales	$10,000		$18,000
Credit sales	28,900		35,000
Total sales	$38,900		$53,000

Credit sales are collected over a 3-month period: 40% in the month of sale, 30% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible.

Inventory purchases average 68% of a month's total sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month.

Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner.

Rent is $4,800 per month.

Taxes to be paid in June are $6,780.

The owner also tells you that he expects cash sales of $18,600 and credit sales of $54,000 for June. No minimum cash balance is required. The owner of the company doesnt have access to short-term loans.

Required:

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1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. Round calculations and final answers to the nearest dollar. Be sure to enter percentages as whole numbers.

Cash Budget For June
Beginning cash balance			$fill in the blank 2f297b02a06dff2_1
Collections:
Cash sales			fill in the blank 2f297b02a06dff2_2
Credit sales:
Current month
$fill in the blank 2f297b02a06dff2_3 fill in the blank 2f297b02a06dff2_4 %			fill in the blank 2f297b02a06dff2_5
May credit sales
$fill in the blank 2f297b02a06dff2_6 fill in the blank 2f297b02a06dff2_7 %			fill in the blank 2f297b02a06dff2_8
April credit sales			fill in the blank 2f297b02a06dff2_9
Total cash available				$fill in the blank 2f297b02a06dff2_10
Less disbursements:
Inventory purchases:
Current month
$fill in the blank 2f297b02a06dff2_11 fill in the blank 2f297b02a06dff2_12 %			$fill in the blank 2f297b02a06dff2_13
Prior month
$fill in the blank 2f297b02a06dff2_14 fill in the blank 2f297b02a06dff2_15 %			fill in the blank 2f297b02a06dff2_16
Salaries and wages			fill in the blank 2f297b02a06dff2_17
Rent			fill in the blank 2f297b02a06dff2_18
Taxes			fill in the blank 2f297b02a06dff2_19
Total cash needs				fill in the blank 2f297b02a06dff2_20
Excess of cash available over needs				$fill in the blank 2f297b02a06dff2_21

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2. Conceptual Connection: Did the business show a negative cash balance for June?

YesNo

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