Answered step by step
Verified Expert Solution
Question
1 Approved Answer
File Details Accounting for Management Decisi... The following information gives particulars of actual results for May and June and budgeted forecasts for July to
File Details Accounting for Management Decisi... The following information gives particulars of actual results for May and June and budgeted forecasts for July to September for the business of Lars. Month May Credit Sales $ Cash Sales $ 81,600 11,900 June 81,600 9,600 July August September 85,000 10,000 99,000 12,000 95,000 20,000 Credit sales are invoiced on the last day of the month. Of the credit sales, it is found that 80% of accounts are paid within one month of the invoice date and receive a 3% discount. The remaining 20% are paid within two months of the invoice date. No Bad Debts The purchase budget shows: June July August September $50,000 52,000 60,000 64,000 Purchases are paid for 20% in the month of purchase and 80% in the following month. Selling administrative expenses per month are: June $ July $ August $ September $ Wages and Salaries 12,000 15,000 15,000 15,000 Rent 6,600 7,200 7,200 7,200 Depreciation 2,000 2,000 2,000 2,000 Other expenses 10,000 12,000 12,000 12,000 Rent is paid at the beginning of each month. Other cash expenses are paid in the month following the month in which the expense is incurred. Net GST Payable for the June quarter is $12,900. This amount is due in July. In August, the business will pay $14,600 for a new machine. The balance of the Bank account on 30 June is $14,000. Required: Prepare a cash budget for the months of July, August and September and for the three- month period in total.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started