Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Vaughn Company prepares monthly cash budgets. Relevant data from operating budgets for 2025 are as follows. All sales are on account. Collections are expected to

image text in transcribedimage text in transcribed Vaughn Company prepares monthly cash budgets. Relevant data from operating budgets for 2025 are as follows. All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60\%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,240 of depreciation per month. Other data: 1. Credit sales: November 2024,$310,000; December 2024,$396,800. 2. Purchases of direct materials: December 2024,$124,000. 3. Other receipts: January-Collection of December 31,2024 , notes receivable $18,600; February-Proceeds from sale of securities $7,440. 4. Other disbursements: February-Payment of $7,440 cash dividend. The company's cash balance on January 1,2025 , is expected to be $74,400. The company wants to maintain a minimum cash balance of $62,000. Prepare a cash budget for January and February in columnar form. VAUGHN COMPANY Cash Budget \begin{tabular}{lll} January & February \\ $ & $ \\ \hline \end{tabular}

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

Step: 3

blur-text-image

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

Auditing And Assurance Services

Authors: Alvin A. Arens . Randal J. Elder . Mark S. Beasley

18th Global Edition

1292448989, 978-1292448985

More Books

Students also viewed these Accounting questions