Problem 21(6)-4B

MERCURY SHOES INC. Cash Budget For the Three Months Ending June 30, 2014 Jul June Estimated cash receipts from: Cash sales 16,000 18,500 Collections from accounts receivable 138.000 146.400 Total cash receipts 164.900 154,000 Estimated cash payments for: 56.200 66,800 Manufacturing costs Selling and administrative expenses 40,000 46,000 Capital expenditures Other purposes: 24,000 Income tax Dividends Total cash payments 96,200 136,800 Cash increase (decrease) 57,800 28.100 Cash balance at beginning of month 42.000 99,800 Cash balance at end of month 99,800 27.900 Minimum cash balance 40,000 40,000 Excess (deficiency) 59,800 87,900 Supporting calculations Collections of accounts receivable: Sales on Account Percentage April sales 40% May sales: Collected n June Collected in July June sales: Collected in July 60% Collected in August 40% July sales 60% August 20,000 157.500 77,500 88,400 51,000 120.000 15,000 274.400 96,900 127.900 31,000 40,000 9.000 June 48,000 90,000 138.000 Jul 60,000 86,400 146.400 August 157.500 MERCURY SHOES INC. Cash Budget For the Three Months Ending June 30, 2014 Jul June Estimated cash receipts from: Cash sales 16,000 18,500 Collections from accounts receivable 138.000 146.400 Total cash receipts 164.900 154,000 Estimated cash payments for: 56.200 66,800 Manufacturing costs Selling and administrative expenses 40,000 46,000 Capital expenditures Other purposes: 24,000 Income tax Dividends Total cash payments 96,200 136,800 Cash increase (decrease) 57,800 28.100 Cash balance at beginning of month 42.000 99,800 Cash balance at end of month 99,800 27.900 Minimum cash balance 40,000 40,000 Excess (deficiency) 59,800 87,900 Supporting calculations Collections of accounts receivable: Sales on Account Percentage April sales 40% May sales: Collected n June Collected in July June sales: Collected in July 60% Collected in August 40% July sales 60% August 20,000 157.500 77,500 88,400 51,000 120.000 15,000 274.400 96,900 127.900 31,000 40,000 9.000 June 48,000 90,000 138.000 Jul 60,000 86,400 146.400 August 157.500