Screen Shot 2018-06-29 at 9.39.26 PM Screen Shot 2018-06-29 at 9.39.51 PM 2 @ Da Search Search Required: 1. Prepare a schedule of expected cash collections for y, August, and September and for the water in Herbal Care Corp., a distributor of herb-based sunscreens, is ready to begin is third quarter, in which peak sales occur. The company has requested a $40.000, 90-day loan from its bank to help met cash requirements during the quarter. Since Herbal Care has experienced difficulty in paying off its loans in the past, the loan officer at the bank has asked the company to prepare a cash budget for the quarter. In response to this request, the following data have been assembled Schedule of Expected Cash Collections July August September Oster From accounts receivable 7.500 June sales 210 000 9.000 219.000 From budgeted sales 100.000 200.000 2,000 22.000 Augustes 420,000 570,000 September sales 80,000 0.000 Total colections $ 317.800 S 430,000 $ 512,000 a. On July 1, the beginning of the third quarter, the company will have a cash balance of $44,500. b. Actual sales for the last two months and budgeted sales for the third quarter follow (all sales are on account): 2. Prepare a cash budget by month and in total, for the third quarter. (Cash deficiency, repayments and interest should be indicated by a minus sign.) May (actual) June (actual) July (budgeted) August (budgeted) September (budgeted) $ 250.000 $ 300,000 $ 400.000 $ 800.000 $ 320,000 Herbal Care Corp. Cash Budget July August September Quarter Past experience shows that 25% of a month's sales are collected in the month of sale, 70% in the month following sale, and 3% in the second month following sale. The remainder is uncollectible. Beginning cash balance Add receipts Collections from customers Total cash available Less cash disbursements Merchandise purchases c. Budgeted merchandise purchases and budgeted expenses for the third quarter are given below: Merchandise purchases Salaries and wages Advertising Rent payments Depreciation July $240,000 $ 45,000 $130,000 $ 9.000 $ 10,000 August $350,000 $ 50.000 $145,000 S 9.000 $10,000 September $175,000 $ 40,000 $ 80.000 $ 9,000 $ 10,000 Advertising Rent payments Equipment purchases Total cash disbursements Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases on June 30, which will be paid during July, total $180.000 d. Equipment costing $10,000 will be purchased for cash during July e. In preparing the cash budget, assume that the $40,000 loan will be made in July and repaid in September. Interest on the loan wil total $1 200 Financing Borrowings Ropayments Required: 1. Prepare a schedule of expected cash collections for July August, and September and for the quarter in total Tot enog Ending cash balance
