You have been asked to prepare the monthly cash budget for June and July for the Merchandise and Mercantile Company. The company sells a unique product that is specially made for it by a major product manufacturer. The selling price is $23.00 per unit. All sales are on account. Merchandise purchases are also on account. The policy of the company is to purchase sufficient quantity of product to ensure that each month's ending inventory is 50% of the following month's expected sales quantity The assignment file contains extracts from the general journal showing the journal entries pertaining to certain relevant transactions that have occurred and a set of entries the bookkeeper has provided that indicate the transactions expected to occur affecting cash, accounts payable, accounts receivable, and merchandise inventory accounts due to the projected sales revenues and projected merchandise purchases on the master budget. This analysis with other additional data, is shown below. Assume today is May 31, 20X1, and that all dollar amounts are in thousands of dollars Dr Cr May 31 Information From Accounting Records and Planning Documents Extracts From the May 31 Adjusted Trial Balance Cash 4 200 Merchandise inventory 9.400 Accounts receivable 28.600 Accounts payable Extracts From the General Journal Accounts receivable, April sales 39.000 Revenue Cash 19.110 Accounts receivable. April sales Bad debt expense percentage of April sales 1.560 4050 April 30 39,000 19. 110 May 31 4,050 April 30 39,000 19.110 1,560 May 31 78,200 15,600 38,318 16,200 US Extracts From the May 31 Adjusted Trial Balance Cash 4,200 Merchandise inventory 9,400 Accounts receivable 28,600 Accounts payable Extracts From the General Journal Accounts receivable, April sales 39,000 Revenue Cash 19, 110 Accounts receivable, April sales Bad debt expense, percentage of April sales 1,560 Allowance for doubtful accounts Accounts receivable, May sales 78,200 Revenue Cash 53.918 Accounts receivable, April sales Accounts receivable, May sales Merchandise inventory 16,200 Accounts payable, May purchases Accounts payable, May purchases 12,150 Cash, payment May purchases Projected Entries to the General Journal for Selected Anticipated Transactions as per Master Budget Accounts receivable, June sales 108,100 Revenue Cost of sales for June 18,800 Inventory Accounts payable, May purchases 4,050 Cash, May purchases Cash Accounts receivable, April sales Accounts receivable. July sales 83,030 Sales revenue Accounts receivable, August sales 106.030 Sales revenue Period fixed expenses, August 2,350 Accumulated depreciation, August Cash Variable operating expenses (percent of sales) 10,603 Cash 12,150 June 30 108.100 18,800 4,050 N 2.730 July 31 83.030 August 31 106,030 675 1.675 10,603 Jule June Merchandise purchases 75 % 25 % 6. Calculate the balance in the accounts receivable on June 30. Assume all receivables are due to sales on account Balance 7. Calculate the balance in the cash account on June 30, based on the transactions projected to occur in June. Use the collection and disbursement percentages previously calculated. Assume that fixed expenses occur evenly in each month of the vear Balance 8. Prepare a cash budget for July, in good form. Use the collection and disbursement percentages previously calculated. (Amounts to be deducted should be indicated by a minus sign.) Cash budget for July Cash Budget Month Ended July 31, 20XX July cash collections: July cash disbursements for merchandise purchases: Selling and administration expenses: 0 You have been asked to prepare the monthly cash budget for June and July for the Merchandise and Mercantile Company. The company sells a unique product that is specially made for it by a major product manufacturer. The selling price is $23.00 per unit. All sales are on account. Merchandise purchases are also on account. The policy of the company is to purchase sufficient quantity of product to ensure that each month's ending inventory is 50% of the following month's expected sales quantity The assignment file contains extracts from the general journal showing the journal entries pertaining to certain relevant transactions that have occurred and a set of entries the bookkeeper has provided that indicate the transactions expected to occur affecting cash, accounts payable, accounts receivable, and merchandise inventory accounts due to the projected sales revenues and projected merchandise purchases on the master budget. This analysis with other additional data, is shown below. Assume today is May 31, 20X1, and that all dollar amounts are in thousands of dollars Dr Cr May 31 Information From Accounting Records and Planning Documents Extracts From the May 31 Adjusted Trial Balance Cash 4 200 Merchandise inventory 9.400 Accounts receivable 28.600 Accounts payable Extracts From the General Journal Accounts receivable, April sales 39.000 Revenue Cash 19.110 Accounts receivable. April sales Bad debt expense percentage of April sales 1.560 4050 April 30 39,000 19. 110 May 31 4,050 April 30 39,000 19.110 1,560 May 31 78,200 15,600 38,318 16,200 US Extracts From the May 31 Adjusted Trial Balance Cash 4,200 Merchandise inventory 9,400 Accounts receivable 28,600 Accounts payable Extracts From the General Journal Accounts receivable, April sales 39,000 Revenue Cash 19, 110 Accounts receivable, April sales Bad debt expense, percentage of April sales 1,560 Allowance for doubtful accounts Accounts receivable, May sales 78,200 Revenue Cash 53.918 Accounts receivable, April sales Accounts receivable, May sales Merchandise inventory 16,200 Accounts payable, May purchases Accounts payable, May purchases 12,150 Cash, payment May purchases Projected Entries to the General Journal for Selected Anticipated Transactions as per Master Budget Accounts receivable, June sales 108,100 Revenue Cost of sales for June 18,800 Inventory Accounts payable, May purchases 4,050 Cash, May purchases Cash Accounts receivable, April sales Accounts receivable. July sales 83,030 Sales revenue Accounts receivable, August sales 106.030 Sales revenue Period fixed expenses, August 2,350 Accumulated depreciation, August Cash Variable operating expenses (percent of sales) 10,603 Cash 12,150 June 30 108.100 18,800 4,050 N 2.730 July 31 83.030 August 31 106,030 675 1.675 10,603 Jule June Merchandise purchases 75 % 25 % 6. Calculate the balance in the accounts receivable on June 30. Assume all receivables are due to sales on account Balance 7. Calculate the balance in the cash account on June 30, based on the transactions projected to occur in June. Use the collection and disbursement percentages previously calculated. Assume that fixed expenses occur evenly in each month of the vear Balance 8. Prepare a cash budget for July, in good form. Use the collection and disbursement percentages previously calculated. (Amounts to be deducted should be indicated by a minus sign.) Cash budget for July Cash Budget Month Ended July 31, 20XX July cash collections: July cash disbursements for merchandise purchases: Selling and administration expenses: 0