Ex. 186 Cruises, Inc. has budgeted sales revenues as follows: June July August Credit sales $135,000 $125.000 590,000 Cash sales 90.000 255.000 195.000 Total sales $225.000 SINO,000 S285.000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on credit and is paid in full at the same month of purchase. Budgeted inventory purchases are: June $300,000 July 240,000 August 105.000 Other cash disbursements budgeted: (a) selling and administrative expenses of S48.000 each month. (b) dividends of S103,000 will be paid in July, and (c) purchase of equipment in August for $30,000 cash. B. The company wishes to maintain a minimum cash balance of 550,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July I was $50.000. Assume that borrowed money in this case is for one month. August Instructions Prepare a cash budget for the months of July and August. Prepare separate schedules for expected collections from customers and expected payments for purchases of inventory. For the Two Months of July and August July Beginning eash balance Add: Receipts Collections from customers Cash sales Total receipts Total available cash Less: Disbursements Purchases Selling and administrative expenses Dividends Equipment purchase Total disbursements Excess (deficiency) of east Financing Borrowings Repayments Ending cash balance *$37.000 x 6% 1/12 -S185 +537,000 - $37,185. August Schedule of Expected Collections from Customers Credit sales same month collections 60% next month collections 40% Total collections