? ?-(+ | Normal Font Paragraph hCo on is a merchandising company that is prepari

Question

? ?-(+ | Normal Font Paragraph hCo on is a merchandising company that is preparing a cash budget for the third quarter. They have the aated sales for July, August, September, and October will be $210,000, $230,000, $220,000, and $240,000. All sales are on credit and collected 35% in the month of sale and .counts recenable from Jme sales ure $136,000. 65% in the month following sale 2. Investory purchases fr July, August, and Septembe are budgeted as $129,600, S? 36,200, and S1 35,500. Accounts payable from June purchases are $71,100 An purchases are paid 40% m the month ofpurchase and 60% in the month following parchase 3. Monthly SGA expenses are $60,000,$5,000 of which represents depreciation 4 In Angust, Bench parchases a machine for $90,000. 5. The July 1 ash balance i $20,000. For debt covesants, Bench must maintain a $10,000 eash balance at month end ne eonpany has access to a revolving line oferedit at 6%. Borrowing occurs ia $5,000 increments and is repaid as soon Schedule of Cash Toa June Sales 136500 80500 73500 210000 77000 September Sales Total 605400 of Expected Cash Disbursement for Purchases August Total 42600 51840 42600 129600 136200 une Purchases 77760 54480 81720 54240 362640 Total Cash Budret Total 12220 226500 Cash Balance 20000 161900- 32460 217000 238720 Cash Available Cash 131900 249460 132240 55000 135960 55000 362640 165000 Selling & Admin Coat of $5000 Total Cash Payments-operating Cash balance 149440 2460 277240 27780 40,000 190960 47760 40000 Line of Credit

Explanation / Answer

Solution:-

Particulars July Aug Sep Opening Cash 20000 51660 10000 Add:-Cash for same month sale 73500 80500 77000 Add:-Cash in following month 136000 136500 149500 Less:-Cash paid for purchase in same month 51840 54480 54240 Less:-Cash paid in following month 71000 77760 81720 Less:- Monthly cash exp (60000-5000) 55000 55000 55000 Less:- Machine - 90000 - LESS:-Interest (18580*6/100)*1/12 93 51660 (8580) 45447 Minimum Balance 10000 Loan Taken 18580

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

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