b A schedule of expected cash disbursements for merchandise purchases for April,
ID: 2404127 • Letter: B
Question
b A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total Answer is complete and correct. Schedule ot Expected Cash Disbarsements Tor Merchandise Purchases Beginning accounts S 133,000 133,000 520,800 255?01 255,850 + 511,700 117,000?, 117,600 IS 516,250 |S 373,450 $ 1,283,100 20,40020,400 260,400 Aprl purchases May purchases June purchases Total cashh $ 393,400 3 Prepare a cash budget for Aprl, May, and June as well as in total for the quarter. (Cash deficiency, repayments and interest should be indicated by a minus sign) Answer is complete but not entirely correct. Inc. Cash Budget For the Quarter Ended June 30 May Beginning cash balance Add collections from customers Total cash available Less cash disbursements 61,000 s 40,100 s 40,150 61,000 98,000685,600668,2001,751,800 700,350 1,812,800 459,000 725,700 383.400 516.250373 450 1,23,100 20, 500 0.00 1100 100,700 Purchases for inventory Selling expenses Administrative expenses Land purchases Dividends paid Total cash disbursements Excess (doficiency) of cash available ov 373,450 34,500 11,900 90,000 119.0003 243,.500 47,000 1,713,300 47,000 39,000 550,90074255039,000 99,500 419850 (91,900) (16,850) 288,500 dsbursements Financing 32,000 57 000 189,000 1 189,000 O189,000 Repaymont 5,100 5,100 303, 100 40.100 ?S 40150 (s 482.600 IS 402000 Interest Total tnarcing 132,000 57.000 194,100 Ending cash balanceExplanation / Answer
Corrections needed and details of errors.
Error no 1. The Amount of Repayment is a deduction from cash balance so it should be written with a minus sign or Parentheses. This error needs to be corrected in monthly and quarterly total.
Error no 2. The Payment of Interest is also an expense paid in cash hence it should also be written with negative sign or Parenthesis. This error needs to be corrected in monthly and quarterly total.
Error no 3. In the Month of june the amount of Financing is zero because repayment is done for old credit line loan. This error needs to be corrected in monthly and quarterly total.
Error 4.Ending Cash balance in the month of June is Incorrect. The Correct Closing Balance of Cash in June will be ($288500-189000-5100) $94400. Ending closing balance of June is also adding Total Financing during the month by mistake.
There are basically two major Mistakes which are Error 1 and 2 stated above. Other Errors such as ending cash balance will be corrected by default.
Cash Budget with major heads given below.
April
May
June
Quarter
Beginning Cash Balance
$ 61,000.00
$ 40,100.00
$ 40,150.00
$ 61,000.00
Add: Collections From Customers
$ 398,000.00
$ 685,600.00
$ 668,200.00
$ 1,751,800.00
Total Cash Available
$ 459,000.00
$ 725,700.00
$ 708,350.00
$ 1,812,800.00
Less: Total Cash Disbursements
$ 550,900.00
$ 742,550.00
$ 419,850.00
$ 1,713,300.00
Excess (Deficiency of Cash Available over Disbursements
$ (91,900.00)
$ (16,850.00)
$ 288,500.00
$ 99,500.00
Financing
Borrowing
$ 132,000.00
$ 57,000.00
$ 189,000.00
Repayment
$ (189,000.00)
$ (189,000.00)
Interest
$ (5,100.00)
$ (5,100.00)
Total Financing
$ 132,000.00
$ 57,000.00
$ -
Ending Cash Balance
$ 40,100.00
$ 40,150.00
$ 94,400.00
$ 94,400.00
April
May
June
Quarter
Beginning Cash Balance
$ 61,000.00
$ 40,100.00
$ 40,150.00
$ 61,000.00
Add: Collections From Customers
$ 398,000.00
$ 685,600.00
$ 668,200.00
$ 1,751,800.00
Total Cash Available
$ 459,000.00
$ 725,700.00
$ 708,350.00
$ 1,812,800.00
Less: Total Cash Disbursements
$ 550,900.00
$ 742,550.00
$ 419,850.00
$ 1,713,300.00
Excess (Deficiency of Cash Available over Disbursements
$ (91,900.00)
$ (16,850.00)
$ 288,500.00
$ 99,500.00
Financing
Borrowing
$ 132,000.00
$ 57,000.00
$ 189,000.00
Repayment
$ (189,000.00)
$ (189,000.00)
Interest
$ (5,100.00)
$ (5,100.00)
Total Financing
$ 132,000.00
$ 57,000.00
$ -
Ending Cash Balance
$ 40,100.00
$ 40,150.00
$ 94,400.00
$ 94,400.00
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.