Question
The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following:
The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following:
- Cash balance on June 1 is $786.
- Actual sales for April and May are as follows:
April | May | ||
Cash sales | $10,000 | $18,000 | |
Credit sales | 28,900 | 35,000 | |
Total sales | $38,900 | $53,000 |
- Credit sales are collected over a 3-month period: 40% in the month of sale, 30% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible.
- Inventory purchases average 68% of a month's total sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month.
- Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner.
- Rent is $4,200 per month.
- Taxes to be paid in June are $6,780.
The owner also tells you that he expects cash sales of $18,600 and credit sales of $54,000 for June. No minimum cash balance is required. The owner of the company doesnt have access to short-term loans.
Required:
Question Content Area
1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. Round calculations and final answers to the nearest dollar. Be sure to enter percentages as whole numbers.
Cash Budget For June | ||||||
Beginning cash balance | $fill in the blank 02548effafecff9_1 | |||||
Collections: | ||||||
Cash sales | fill in the blank 02548effafecff9_2 | |||||
Credit sales: | ||||||
Current month | ||||||
$fill in the blank 02548effafecff9_3 fill in the blank 02548effafecff9_4 % | fill in the blank 02548effafecff9_5 | |||||
May credit sales | ||||||
$fill in the blank 02548effafecff9_6 fill in the blank 02548effafecff9_7 % | fill in the blank 02548effafecff9_8 | |||||
April credit sales | fill in the blank 02548effafecff9_9 | |||||
Total cash available | $fill in the blank 02548effafecff9_10 | |||||
Less disbursements: | ||||||
Inventory purchases: | ||||||
Current month | ||||||
$fill in the blank 02548effafecff9_11 fill in the blank 02548effafecff9_12 % | $fill in the blank 02548effafecff9_13 | |||||
Prior month | ||||||
$fill in the blank 02548effafecff9_14 fill in the blank 02548effafecff9_15 % | fill in the blank 02548effafecff9_16 | |||||
Salaries and wages | fill in the blank 02548effafecff9_17 | |||||
Rent | fill in the blank 02548effafecff9_18 | |||||
Taxes | fill in the blank 02548effafecff9_19 | |||||
Total cash needs | fill in the blank 02548effafecff9_20 | |||||
Excess of cash available over needs | $fill in the blank 02548effafecff9_21 |
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