On March 1 of the current year, Spicer Corporation compiled information to prepa

Question

On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company's sales are made on account. The following information has been provided by Spicer's management:

The company's collection activity on credit sales historically has been as follows:

Spicer's total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400,000 per month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter.

Compute Spicer's budgeted cash balance at the ends of March, April, and May. (Omit the "$" sign in your response.)

On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company's sales are made on account. The following information has been provided by Spicer's management:

Explanation / Answer

Cash Balance at March 1 = 500,000

Cash received at March = 50% * 443,000 + 30% * 400,000 + 15% * 300,000 = 386,500

Cash expenditure = 400,000

Cash balance at March 31 = 500,000 + 386,500 - 400,000 = 486,500

Cash Balance at Apr 1 = 486,500

Cash received at Apr = 50% * 531,000 + 30% * 443,000 + 15% * 400,000 = 458,400

Cash expenditure = 400,000

Cash balance at Apr 30 = 486,500 + 458,400 - 400,000 = 544,900

Cash Balance at May 1 = 544,900

Cash received at May = 50% * 800,000 + 30% * 531,000 + 15% * 443,000 = 625,750

Cash expenditure = 400,000

Cash balance at May 31 = 544,900 + 625,750 - 400,000 = 770,650

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