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Quagmire Inc. has prepared the following sales budget for the quarter of April, May and June: All of the sales are on credit. Quagmire collects
Quagmire Inc. has prepared the following sales budget for the quarter of April, May and June:
All of the sales are on credit.
Quagmire collects from customers as follows:
of sales in the month of sale
in the month following the sale, and
in the second month following the sale.
Quagmire expects cost of goods sold to be of sales.
They keep of next months expected cost of goods sold in ending inventory. Below are budgeted purchases of inventory.
All purchases are paid for in the SAME month as the purchase.
Below is the budget for variable and fixed selling and administrative expenses.
Selling and admin expenses are paid in the month AFTER they are incurred.
Fixed expenses include depreciation of each month.
Quagmire has $ of cash on hand at he beginning of May.
Prepare a cash budget for May and June. Use excel so that multiple attempts are easier.
Compute the beginning balance in cash for June.
Hint: the answer is If you computed this correctly it was your ending cash balance for May you should be able to answer the next question too!
Compute the ending balance in cash for June.
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