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@ Pearson Session Ended @) poarson Session Ende x Connect https://newconnect mheducation.com/flow/connect.html Castor, Inc, is preparing its master budget for the quarter ended June 30 Budgeted sales and cash payments for merchandise for the next three months follow Sales Cash poyments forchandise 30,60 $41,400 $25,40 23,00015,40 15, Sales are 75% cash and 25% on credit All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $13.400 in cash, $13,400 in accounts recesvable. $11,000 in accounts payable, and a $3,400 balance in loans payable A minimum cash balance of $13,400 is required. Loans are obtained at the end of any month when a cash shortage occurs Interest is 1% per month based on the beginning of the month loan balance and is paid at each month-end lf an excess balance of cash exists, loans are repaid at the end of the month Operating expenses are paid in the month incurred and include sales commissions (10% of sales), shipping (4% of sales), office salaries ($4.400 per month), and rent ($6400 per month Prepare a cash budget for each of the months of April, May and June. (Negative balances and Loan repayment amounts (if any) should be indiceted with minus sign Round your final answers to the nearest whole doller.) Cash Budget For April, May, and June April Beginning cash balance 13, 400 cash avalable Cash payent or re to search

Explanation / Answer

Castor Inc Cash Budget For April, May , June April May June Beginning cash balance 13400 13400 21392 Cash receipts 36350 38700 29400 Total cash available 49750 52100 50792 Cash disbursements Payments for merchandise 23000 15400 15800 Sales commissions (10% of sales) 306 414 254 Shipping (4% of sales) 1224 1656 1016 Office salaries 4400 4400 4400 Rent 6400 6400 6400 Interest on bank loan April ($3,400 x 1%) 34 May (2414*1%) 24 Preliminary cash balance 14386 23806 22922 Additional loan from bank Repayment of loan to bank 986 2414 0 Ending cash balance 13400 21392 22922 Loan balance, end of month 2414 0 0 CASTOR, INC. Cash Receipts BudgetFor April, May, and June Sales 30600 41400 25400 Less:Ending AR 7650 10350 6350 Cash receipts from Cash sales 22950 31050 19050 Collection of prior month’s receivables 13400 7650 10350 Total Cash Receipts 36350 38700 29400

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