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Following information relates to Acco Co. Beginning cash balance on July 1: $50,000. Cash receipts from sales: 27% is collected in the month of sale,
Following information relates to Acco Co.
- Beginning cash balance on July 1: $50,000.
- Cash receipts from sales: 27% is collected in the month of sale, 50% in the next month, and 23% in the second month after accounts are negligible and can be ignored). Sales amounts are: May (actual), $1,720,000; June (actual), $1,200,000; and July (budgeted), $1,400,000.
- Payments on merchandise purchases: 54% in the month of purchase and 46% in the month following purchase. Purchases amounts are: June (actual), $430,000; and July (budgeted), $600,000.
- Budgeted cash payments for salaries in July: $211,000.
- Budgeted depreciation expense for July: $12,000.
- Other cash expenses budgeted for July: $150,000.
- Accrued income taxes due in July: $80,000.
- Bank loan interest paid in July: $6,600.
Additional Information:
- Cost of goods sold is 40% of sales.
- Inventory at the end of June is $80,000 and at the end of July is $120,000.
- Salaries payable on June 30 are $50,000 and are expected to be $40,000 on July 31.
- The equipment account balance is $1,600,000 on July 31. On June 30, the accumulated depreciation on equipment is $280,000.
- The $6,600 cash payment of interest represents the 1% monthly expense on a bank loan of $660,000.
- Income taxes payable on July 31 are $164,640, and the income tax rate is 35%.
- The only other balance sheet accounts are Common Stock, with a balance of $661,800 on June 30; and Retained Earnings, with a balance of $1,072,000 on June 30.
Make a budgeted income statement for the month of July and a budgeted balance sheet for July 31.
- Calculation: Calculate the budgeted cash receipts and cash payments.
- Inc Stmt Bal Sheet: Make a budgeted income statement for the month of July and a budgeted balance sheet for July 31.
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