Use the following information to prepare the July cash budget for Acco Company. Ignore the \"Loan activity" section of the budget a. Beginning cash balance on July 1: $50,000. b. Budgeted cash receipts from sales: 30% is collected 'In the month of sale, 50% in the next month, and 20% in the second month after sale. Sales amounts are May (actual), $1,720,000; June (actual), $1,200,000; and July (budgeted), $1,400,000. c. Budgeted cash payments on merchandise purchases: 60% in the month of purchase and 40% in the month following purchase. Purchase amounts are June (actual), $700,000; and July (budgeted), $750,000. d. Budgeted cash payments for salaries in July. $275,000. e. Budgeted cash payments for sales commissions for July: $200,000. f. Budgeted cash payment for Income taxes in July: $80, 000. g. Budgeted cash payment for loan interest in July. $6, 600. Calculation Cash Budget Calculate the budgeted cash receipts and cash payments. Calculation of Cash Receipts from Sales -Collected in-- July 31 Total Sales May June July Accounts Receivable Credit sales from: May $ 1,720,000 $ 516,000 $ 860,000 $ 344,000 $ 0 June 1,200,000 0 360,000 600,000 240,000 July 1,400,000 0 0 420,000 980,000 Totals $ 4,320,000 $ 516,000 $ 1,220,000 $ 1,364,000 $ 1,220,000 Calculation of Cash Payments for Merchandise --Paid in---- July 31 Total Purchases Accounts June July payable Purchases from: June 700,000 $ 420,000 $ 280,000 $ 0 July 750,000 450,000 300,000 Totals 1,450,000 $ 420,000 $ 730,000 $ 300,000 Calculation Cash Budget Prepare the July cash budget for Acco Company ACCO COMPANY Cash Budget July 31 Beginning cash balance $ 50,000 Add: Cash receipts from sales 1,364,000 Total cash available $ 1,414,000 Less: Cash payments for: Income taxes 80,000 Interest on loan 6,600 Depreciation expense 200,000 Repayment of bank loan 730,000 Salaries 275,000 Total cash payments 1,291,600 Total cash payments $ 122,400