Monthly Cash Budget Sutter, Inc. is a wholesaler for its only product, deluxe wireless rechargeable electric shavers, which sell for $70 each and cost Sutter $48 each. On June 1, Sutters management requested a cash budget for June. The following selected account balances at May 31 were gathered by the accounting department: Cash $56,000 Marketable securities (at cost) 160,000 Accounts receivable (all trade) 2,170,000 Inventories (12,000 units) 576,000 Operating expenses payable 196,800 Accounts payable (all merchandise) 902,400 Note payable 600,000 Actual sales for April and May were 30,000 and 50,000 units, respectively. Projected unit sales for June and July are 40,000 and 20,000, respectively. Experience indicates that 50% of sales should be collected in the month of sale, 30% in the month following sale, and the balance in the second month following sale. Uncollectible accounts, returns, and allowances are negligible. Planned purchases should provide ending inventories equal to 30% of next months unit sales volume. Approximately 60% of the purchases are paid for in the month of purchase and the balance in the following month. Monthly operating expenses are budgeted at $9.60 per unit sold plus a fixed amount of $288,000 including depreciation of $112,000. Except for depreciation, 70% of operating expenses are paid in the month incurred and the balance in the following month. Interest expense is included in operating expenses. Special anticipated June transactions include the following: 1. Declaration of a $60,000 cash dividend to be paid 2 weeks after the June 20 date of record. 2. Sale of all but $40,000 of the marketable securities held on May 31; a gain of $18,000 is anticipated. 3. Payment of $50,000 installment on the note payable. 4. Trade-in of an old company plane originally costing $300,000 and now having accumulated depreciation of $200,000 at a gain of $160,000 on a new plane costing $2,000,000. Sufficient cash will be paid at the time of trade-in so that only 50% of the total price will have to be financed. 5. Sutters treasurer has a policy of maintaining a minimum month-end cash balance of $40,000 and has a standing arrangement with the bank to borrow any amount up to a limit of $400,000. Prepare a cash budget for Sutter, Inc., for June. Collections in June from customers: From April sales Answer From May sales Answer From June sales Answer Total collections Answer Payments on account for merchandise purchases: May June Unit Sales Answer Answer Ending inventories Answer Answer Total units to be available Answer Answer Beginning inventories Answer Answer Units to be purchased Answer Answer Total dollar purchases Answer Answer Portion paid in June Answer Answer Payment of operating expenses: May June Total variable operating expenses Answer Answer Fixed operating expenses Answer Answer Total operating expenses Answer Answer Monthly depreciation Answer Answer Operating expenses requiring payment Answer Answer Amounts to be paid in June Answer Answer Cash required at time of plane purchase: Cost of new plane Answer Book value of old plane Answer Gain on trade-in Answer Total trade-in allowance Answer Balance owing at trade-in Answer Portion to be financed Answer Cash payment required Answer Sutter, Inc. Cash Budget For the Month Ended June 30 Beginning cash balance Answer Cash receipts: Collections from customers (calculated above) Answer Answer Answer Short-term borrowing Answer Cash available Answer Cash disbursements: Payments on accounts payable (calculated above) Answer Payments of operating expenses payable (calculated above) Answer Payment on airplane (calculated above) Answer Answer Answer Total cash disbursements Answer Ending cash balance