Exercise 20-25A Merchandising: Preparing a cash budget LO P4 Use the following information to prepare the July cash budget for Acco Co. it should show expected cash receipts and cash payments for the month and the cash balance expected on July 31 a. Beginning cash balance on July 568,000 b. Cash receipts from sales 35% is collected in the month of sale, som in the next month, and 15% in the second month after sale funcollectible accounts are negligible and can be ignored Sales amounts are May factual. 51720,000, June (actual), 51.490,000, c. Payments on merchandise purchases: 75% in the month of purchase and 25% in the month following purchase Purchases amounts are June (actual), S430,000, and July (budgeted) $760,000 d. Budgeted cash payments for salaries in July 5400.000 e. Budgeted depreciation expense for July $11000 Other cash expenses budgeted for July $240,000 9. Accrued income taxes due in July $80,000 h. Bank loan interest paid in July $8.500 Calculation of Cash Receipts from Sales Collected in July 31 Total Sales June Accounts Rec. May July Credit sales from May $ 1.720,000 June 1,490,000 July 1,600,000 Totals 4,810,000 $ 0 $ 0 0 CA Calculation of Cash Payments for Merchandise Paid in July 31 Total Purchases June July Accounts Pay Purchases from June 430,000 July 760,000 Totals 1,190,000 $ 0 $ 0 ACCO CO. Cash Budget For the Month Ended July 31 $ 68,000 Beginning cash balance Cash receipts from sales Total cash available Cash payments for: Salaries 400,000 Other expenses 240,000 Accrued taxes 80,000 Interest on bank loan 8,500 728,500 Total cash payments Ending cash balance $(728,500)