Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

. Sunshine Company is ready to begin its third quarter, in which peak sales occur. The company requested a $30,000, 90-day loan from its bank

. Sunshine Company is ready to begin its third quarter, in which peak sales occur. The company requested a $30,000, 90-day loan from its bank to help meet cash requirements during the quarter. Since Sunshine Company 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 the request the following data has been assembled.

1. On July 1, the beginning of the quarter, the company will have a cash balance of $94,500.

2. The selling price per unit is $50. Actual sales units for the last two months and the budgeted sales for the third quarter follow:

image text in transcribed
May [actual] 8000 units June {actual} 7000 units July {budgeted} 8000 units August {budgeted} 12000 units September {budgeted} 7500 units The company expects to sell 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month of sale and 40% in the month following sale. | 3. Budgeted merchandise purchase and budgeted expenses for the quarter are given below: July August September Merchandise purchases $240,000 $350,000 $175,000 Salaries and wages $45,000 $50,000 $40,000 Utility $130,000 $145,000 $80,000 Rent Payments $9,000 $9,000 $9,000 Other operating expenses {including depreciation expense]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Educational Foundations

Authors: Leslie Kaplan, James D Stice, William Owings

2nd Edition

1285968298, 9781285968292

More Books

Students also viewed these Accounting questions

Question

What type of office space and equipment are provided?

Answered: 1 week ago