Monthly Cash Budget Sutter, Inc. is a wholesaler for its only product, deluxe wireless rechargeable electric shavers, which sell for $69 each and cost Sutter $47 each. On June 1, 2016, Sutter's management requested a cash budget for June. The following selected account balances at May 31, 2016, were gathered by the accounting department: Cash 556,000 Marketable securities at cost) 160,000 Accounts receivable all trade) 2,170,000 Inventaries (12.000 units) 564,000 Operating expenses payable 196,800 Accounts payable call merchandise) 902.400 Note payable due 12/31/2016) 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 sow 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 month's 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 $9.10 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 518,000 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 $2,010,000. Sufficient cash will be paid at the time of trade-in so that only 50% of the total price will have to be financed. S. Sutter's 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 Prenare Prepare a cash budget for Sutter, Inc., for June 2016. Collections in June from customers: From April sales $ From May sales From June sales Total collections $ Payments on account for merchandise purchases: May June Unit Sales Ending inventories Total units to be available Beginning inventories Units to be purchased Total dollar purchases $ Portion paid in June $ $ $ Payment of operating expenses: May June $ Total variable operating expenses $ Fixed operating expenses Total operating expenses Monthly depreciation Operating expenses requiring payment $ Amounts to be paid in June $ $ $ Cach rotirad timnafmann nich Cash required at time of plane purchase: Cost of new plane $ Book value of old plane $ Gain on trade-in Total trade-in allowance Balance owing at trade-in Portion to be financed Cash payment required Sutter, Inc. Cash Budget For the Month Ended June 30, 2016 Beginning cash balance Cash receipts: Collections from customers (calculated above) Short-term borrowing Cash available Cash disbursements: Payments on accounts payable (calculated above) Payments of operating expenses payable (calculated above) Payment on airplane (calculated above) Total cash disbursements Ending cash balance $
