introduction to managerial

rROBLEM T-17A Cash Budget with supporting schedules [Lo2,Lo4,Lo8] a merchandising company that sells binders, supplies. company is planning its paper, and other school to bor cash needs for the third quarter. In the past, Janus Products has had money during the third quarter to support peak sales of back-to-school materials, which occur during The has been assembled to assist in preparing a cash budget for the quarter: CHECK FIGURE Budgeted monthly absorption costing income statements for July-October as follows: are August collections: $47.760 July August September October (3) July ending cash balance: $8,410 $40,000 $70,000 $50,000 $45,000 Cost of goods sold 24,000 42,000 30,000 27,000 Gross margin 16,000 28,000 20.000 18,000 Selling and administrative expenses: Selling expense 11,700 8,500 Administrative expense 5,900 7,200 6,100 Total selling and administratie expenses.... 12,800 18,900 14,600 13,200 s 3,200 9,100 5,400 4,800 et operating income 'Includes $2,000 depreciation each month. b Sales are 20% for cash and 80% on credit. Credit sales are collected over a three-month period with 10% collected in the month of sale, 70% in the month following sale, and 20% in the second month following sale. May sales totaled S30.000, and June ales totaled $36.000 Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable for inventory purchases at June 30 total $11.700 75% of the cost of the merchandise to be sold in The company maintains its ending inventory levels at the following month. The merchandise inventory at June 30 is $18,000 Land costing S4,500 will be purchased in Jul Dividends of $1.000 will be declared and paid in September. The cash balance on June 30 is $8,000; the company must maintain a cash balance of at least this i. amount at the end of each month of s1.000 at The company has an agreement with a local bank that allows it to borrow in increments the beginning of each month, up to a total loan balance of The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. The company ould, as far as it is able, repay the loan plus accumulated interest at the end of the quarter Prepare a schedule of expected cash collections for July, August, and September and for the quarter