Question
Madden Company provided the following sales information for the month of May: April Actual May Budget Cash sales $ 17,550.00 $ 18,000.00 Credit sales 99,000.00
Madden Company provided the following sales information for the month of May:
April Actual | May Budget | |
Cash sales | $ 17,550.00 | $ 18,000.00 |
Credit sales | 99,000.00 | 126,000.00 |
Total sales | $116,550.00 | $144,000.00 |
For credit sales, the collection pattern is as follows:
Month of sales 70%
Month following sales 25%
Based on past experience, the company estimates the remaining credit sales are uncollectible.
Inventory purchases average 70% of the same month's total sales.
Payments for inventory are made as follows:
Month of purchase 40%
Month following purchase 60%
other expenses as follows:
Salaries and wages per month | $ 10,440.00 |
Rent per month | $ 3,600.00 |
Utilities per month | $ 5,200.00 |
Insurance per quarter to be paid in May | $ 900.00 |
Depreciation expenses per month | $ 1,500.00 |
May 1 cash balance is $9,216.00.
Prepare a cash budget for the month of May and use it to answer the following questions.
Cash sales and collections on account for the month are $_____________.
Payments for inventory for the month are $________________.
Payments for all other expenses for the month are $______________.
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