Question
Wynn Company has budgeted sales revenues as follows: June July August Credit sales $135,000 $145,000 $ 90,000 Cash sales 90,000 255,000 195,000 Total sales $225,000
Wynn Company has budgeted sales revenues as follows:
June July August Credit sales $135,000 $145,000 $ 90,000 Cash sales 90,000 255,000 195,000 Total sales $225,000 $400,000 $285,000
Budgeted inventory purchases $300,000 $250,000 $105,000
Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on credit and 50% is paid in the month of purchase and 50% in the month following purchase. Other cash disbursements budgeted: selling and administrative expenses of $48,000 each month. The beginning cash balance on July 1 was $50,000. Requirements: Prepare a cash budget for the month of July. Prepare separate schedules for expected collections from customers and expected payments for purchases of inventory. Round to the nearest dollar.
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