The following information pertains to Amigo Corporation: Month Sales Purchases S
ID: 2483183 • Letter: T
Question
The following information pertains to Amigo Corporation:
Month Sales Purchases
September 38,000 14,000
October 42,000 16,000
November 48,000 18,000
December 60,000 20,000
Cash is collected from customers in the following manner: Month of sale (2% cash discount) 30% Month following sale 50%
Two months following sale 15% .Amount uncollectible 5%
40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. • Other expenses to be paid in December include Utilities of $6,000 and Salaries of $20,000. Depreciation expense for the month is $12,000.
Prepare a cash budget for December
Explanation / Answer
Solution:
Cash Budget for Deecmber Opening Balance 0 Cash collections October sale - 15 % 6300 November sale 24000 December sale - 30 % 18000 Total cash collection 48300 Less: Cash discursements November purchase - 60 % 10800 December purchase - 40 % 16000 Utlities Expense 6,000 Salaries Expense 20,000 Ending Balacne - 4,500Related Questions
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