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.

1. Beginning cash balance on July 1: $77,000.
2. 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.
3. 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.
4. Budgeted cash payments for salaries in July: $130,000.
5. Budgeted depreciation expense for July: $13,000.
6. Other cash expenses budgeted for July: $130,000.
7. Accrued income taxes due in July: $90,000.
8. Bank loan interest paid in July: $7,000.

32 Calculate the budgeted cash receipts and cash payments. Calculation of Cash Receipts from Sales --Collected in-- Total Sales May June 2.12 points July 31 Accounts Rec. July Skipped Credit sales from: May June $ 1,810,000 eBook July Totals 1,250,000 1,470,000 4,530,000 $ Hint $ 0 $ 0 $ 0 $ 0 References Calculation of Cash Payments for Merchandise --Paid in- July 31 Accounts Pay. Total Purchases June July Purchases from: June $ 520,000 July Totals 460,000 980,000 $ $ 0 $ 0 $ 0 32 Prepare the July cash budget for Acco Co. 2.12 points ACCO CO. Cash Budget For the Month Ended July 31 Skipped eBook Total cash available Cash payments for: Hint References Total cash payments EA

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