P9 37 See bottom for remainder of question

sale. Experience indicate taht 50 percent of the billings will be collected during the month of sale 40 percent in the gollowin gmonth, 8 precent in the second followin gmonth, and 2 percent will be uncollectible. Total budgeting selling and administrative expenses ( excluding bad debts ) for the fiscal year are estimated at $180,000, of which one hald is fixed expense (inclusive of of a $18,000 annual depreciation charge). Fixed expenses are incurred evenly during the year. the other selling and administrative expenses vary with sales. Expenses are paid during the month incurred.

REQUIRED

A. prepare schedule of estimated cash collections for July

B. prepare a schedule of estimated July cash payments for purchases.

C. prepare schedules of July selling and administrative expenses, separately identifying those requiring cash disbursements.

D. prepare a cash budget in summary form for July

The company must maintain a cash balance of at least $5,000 at the end of cash balance on June 30 is $5,100 end of each month. The 7 The company m ts must be i 8. The company can borrow from its bank as needed. Borrowings and repayments mi are made at the end of a month. When the principal is repaid, interest on the repaymentt paid. The interest rate is 12 percent per year multiples of S100. All borrowings take place at the beginning of a month, and allep Required a. Prepare a monthly schedule of budgeted operating cash receipts for July, Augus September for July, August, and September compuny's bank and repayments to the bank as needed to maintain the minimum cash bulancs b. Prepare a monthly purchases budget and a schedule of budgeted cash payments for purchus c. Prepare a monthly cash budget for July, August, and September. Show borrowings from cash balance LO3 P9-37. Cash Budget The Peoria Supply Company sells for $30 one product that it purchases for $20. Budgeted saes i total dollars for next year are $720,000. The sales information needed for preparing the July follows: udgeted sales in Sales Revenue Month $30,000 42,000 51,000 54,000 May Account balances at July 1 include these: Cash. Merchandise inventory $20,000 ...18,000 The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 50 percent of the budgeted sales in units for the next month. A 2 percent cash discount on sales is allowed if payment is made during the moeth of