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Problem 7 - 5 Preparing a Cash Budget with Supporting Schedules ( LO 2 - CC 6 , 8 , 1 3 ) ( Algo
Problem Preparing a Cash Budget with Supporting Schedules LO CCAlgoProblem Preparing a Cash Budget with Supporting Schedules LO CCAlgo Green Lawn Company sells garden supplies. Management is planning its cash needs for the second quarter. The following information has been assembled to assist in preparing a cash budget for the quarter: a Budgeted monthly income statements for July to October are as follows: Includes $ in depreciation each month. b Sales are for cash and on account. c Sales on account are collected over a threemonth period in the following ratio: collected in the month of sale, collected in the first month following the month of sale, and the remaining collected in the second month following the month of sale. May's sales totalled $ and June's sales totalled $ d Inventory purchases are paid for within days. Therefore, of a month's inventory purchases are paid for in the month of purchase. The remaining are paid in the following month. Accounts payable at June for inventory purchases during June total $ e At the end of each month, inventory must be on hand equal to of the cost of the merchandise to be sold in the following month. The merchandise inventory at June is $ f Dividends of $ will be declared and paid in July. g Equipment costing $ will be purchased for cash in August. The cash balance at June is $; the company must maintain a cash balance of at least $ at all times. i The company can borrow from its bank, as needed, to bolster the cash account. Borrowings and repayments must be in multiples of $ Interest is due only when principal is repaid and is calculated on the amount of repayment for the duration of the time money was borrowed. All borrowings take place at the beginning of a month, and all repayments are made at the end of a month. T Green Lawn Company sells garden supplies. Management is planning its cash needs for the second quarter. The following information has been assembled to assist in preparing a cash budget for the quarter: a Budgeted monthly income statements for July to October are as follows: Includes $ in depreciation each month. b Sales are for cash and on account. c Sales on account are collected over a threemonth period in the following ratio: collected in the month of sale, collected in the first month following the month of sale, and the remaining collected in the second month following the month of sale. May's sales totalled $ and June's sales totalled $ d Inventory purchases are paid for within days. Therefore, of a month's inventory purchases are paid for in the month of purchase. The remaining are paid in the following month. Accounts payable at June for inventory purchases during June total $ e At the end of each month, inventory must be on hand equal to of the cost of the merchandise to be sold in the following month. The merchandise inventory at June is $ f Dividends of $ will be declared and paid in July. g Equipment costing $ will be purchased for cash in August. h The cash balance at June is $; the company must maintain a cash balance of at least $ at all times. i The company can borrow from its bank, as needed, to bolster the cash account. Borrowings and repayments must be in multiples of $ Interest is due only when principal is repaid and is calculated on the amount of repayment for the duration of the time money was borrowed. All borrowings take place at the beginning of a month, and all repayments are made at the end of a month. The annual interest rate is Compute interest on whole months and so forth
Problem Preparing a Cash Budget with Supporting Schedules LO CCAlgoProblem Preparing a Cash Budget with Supporting Schedules LO CCAlgo
Green Lawn Company sells garden supplies. Management is planning its cash needs for the second quarter. The following
information has been assembled to assist in preparing a cash budget for the quarter:
a Budgeted monthly income statements for July to October are as follows:
Includes $ in depreciation each month.
b Sales are for cash and on account.
c Sales on account are collected over a threemonth period in the following ratio: collected in the month of sale,
collected in the first month following the month of sale, and the remaining collected in the second month following the
month of sale. May's sales totalled $ and June's sales totalled $
d Inventory purchases are paid for within days. Therefore, of a month's inventory purchases are paid for in the month
of purchase. The remaining are paid in the following month. Accounts payable at June for inventory purchases
during June total $
e At the end of each month, inventory must be on hand equal to of the cost of the merchandise to be sold in the
following month. The merchandise inventory at June is $
f Dividends of $ will be declared and paid in July.
g Equipment costing $ will be purchased for cash in August.
The cash balance at June is $; the company must maintain a cash balance of at least $ at all times.
i The company can borrow from its bank, as needed, to bolster the cash account. Borrowings and repayments must be in
multiples of $ Interest is due only when principal is repaid and is calculated on the amount of repayment for the
duration of the time money was borrowed. All borrowings take place at the beginning of a month, and all repayments are
made at the end of a month. T
Green Lawn Company sells garden supplies. Management is planning its cash needs for the second quarter. The following
information has been assembled to assist in preparing a cash budget for the quarter:
a Budgeted monthly income statements for July to October are as follows:
Includes $ in depreciation each month.
b Sales are for cash and on account.
c Sales on account are collected over a threemonth period in the following ratio: collected in the month of sale,
collected in the first month following the month of sale, and the remaining collected in the second month following the
month of sale. May's sales totalled $ and June's sales totalled $
d Inventory purchases are paid for within days. Therefore, of a month's inventory purchases are paid for in the month
of purchase. The remaining are paid in the following month. Accounts payable at June for inventory purchases
during June total $
e At the end of each month, inventory must be on hand equal to of the cost of the merchandise to be sold in the
following month. The merchandise inventory at June is $
f Dividends of $ will be declared and paid in July.
g Equipment costing $ will be purchased for cash in August.
h The cash balance at June is $; the company must maintain a cash balance of at least $ at all times.
i The company can borrow from its bank, as needed, to bolster the cash account. Borrowings and repayments must be in
multiples of $ Interest is due only when principal is repaid and is calculated on the amount of repayment for the
duration of the time money was borrowed. All borrowings take place at the beginning of a month, and all repayments are
made at the end of a month. The annual interest rate is Compute interest on whole months and so forth
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