Exercise 20-25A Merchandising: Preparing a cash budget LO P4 Use the following information to prepare the July
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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.
- Beginning cash balance on July 1: $77,000.
- Cash receipts from sales: 30% is collected in the month of sale, 50% in the next month, and 20% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are May (actual), $1,810,000; June (actual), $1,250,000; and July (budgeted), $1,470,000.
- Payments on merchandise purchases: 80% in the month of purchase and 20% in the month following purchase. Purchases amounts are: June (actual), $520,000; and July (budgeted), $460,000.
- Budgeted cash payments for salaries in July: $130,000.
- Budgeted depreciation expense for July: $13,000.
- Other cash expenses budgeted for July: $130,000.
- Accrued income taxes due in July: $90,000.
- Bank loan interest paid in July: $7,000.
Related Book For
Financial and managerial accounting
ISBN: 978-1118016114
1st edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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