Printer Company's budget committee provides the following information: B (Click the icon to view the information.) Read the requirements. Requirement 1. Prepare the schedule of cash receipts from customers for January and February 2018. Assume cash receipts are % in the month of the sale and in the month following the sale. Printer Company Budgeted Cash Receipts from Customers Two Months Ended February 28, 2018 January Current month sales, 60% Prior month sales, 40% Total cash receipts February Budgeted Cash Payments for Selling and Administrative Expenses Two Months Ended February 28, 2018 January February Variable expenses: 40% of last month's Commission Expense 60% of current month's Commission Expense Total payments for variable expenses Fixed expenses 40% of last month's Salaries Expense 60% of current month's Salaries Expense Rent expense Total payments for fixed expenses Total payments for S and A expenses February Printer Company Cash Budget Two Months Ended February 28, 2018 January Beginning cash balance Cash receipts from customers Cash available Cash payments: Purchases of merchandise inventory Selling and administrative expenses Payments for income taxes Total cash payments Ending cash balance Requirements 1. Prepare the schedule of cash receipts from customers for January and February 2018. Assume cash receipts are 80% in the month of the sale and 20% in the month following the sale. 2. Prepare the schedule of cash payments for purchases for January and February 2018. Assume purchases are paid 30% in the month of purchase and 70% in the month following the purchase. 3. Prepare the schedule of cash payments for selling and administrative expenses for January and February 2018. Assume 40% of the accrual for Salaries and Commissions Payable is for commissions and 60% is for salaries. The December 31 balance will be paid in January. Salaries and commissions are paid 30% in the month incurred and 70% in the following month. Rent and income tax expenses are paid as incurred. Insurance expense is an expiration of the prepaid amount. 4. Prepare the cash budget for January and February 2018. Assume no financing took place December 31, 2017, account balances: Cash Accounts Receivable Merchandise Inventory Accounts Payable Salaries and Commissions Payable Budgeted amounts for 2018: Sales, all on account Purchases, all on account Commissions Expense Salaries Expense Rent Expense Depreciation Expense Insurance Expense Income Tax Expense $ 23,000 20,000 22,000 15,500 2,550 January February $ 85,000 $ 85,300 40,300 41,200 4,250 4,265 4,500 4,500 2,000 2,000 600 600 400 400 2,200 2,200
