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.)

  

  Month Credit Sales   Jan. $ 300,000 (actual)   Feb. 400,000 (actual)   Mar. 570,000 (estimated)   Apr. 660,000 (estimated)   May 800,000 (estimated)

Explanation / Answer

Hi,

Please find the detailed answer as follows:

Step 1: Collections Table

Step 2: Cash Budget

Thanks.

Jan Sales Feb Sales Mar Sales Apr Sales May Sales Total
Collections Collections for the Month of March 31 45000 120000 285000 0 0 450000 Collections for the Month of April 30 0 60000 171000 330000 0 561000 Collections for the Month of May 31 0 0 85500 198000 400000 683500

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.