2. A cash budget. Show the budget by month and in total. (Cash deficiency, repay
ID: 2563127 • Letter: 2
Question
2. A cash budget. Show the budget by month and in total. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Earrings Unlimited Cash Budget For the Three Months Ending June 30 April May June Quarter Beginning cash balance Add collections from customers Total cash available Less cash disbursements 0 Merchandise purchases Advertising Rent Salaries Commissions Utilities Equipment purchases Dividends paid Total cash disbursements Excess of cash available over disbursements Financing Borrowings Repayments Interest 0 0 Total financing Ending cash balanceExplanation / Answer
Working Note 4:
Total borrowing done in beginning of April after considering ending cash balance of $61,000 = $150,130
Repayment done in May (after retaining cash balance of $61,000) = $96,510
Balance $53,620 repaid in end of the quarter. (i.e. June 30)
Therefore total interest to be paid in end of june = (Interest @1% on $150,130 for 2 months + Inteerst @1% on $ 53,620 for1 month = $3538.20
Earringd Unlimited Cash Budget For the three months Ending June 30 April May June Quarter Beginning Cash Balance 85,000.00 61,000.00 61,000.00 85,000.00 Add Collections from Customer(Refer working 1) 687,000.00 1,075,500.00 1,330,500.00 3093000 Total Cash Available 772,000.00 1,136,500.00 1,391,500.00 3,178,000.00 Less: Cash Disbursement Merchandise Purchase (Refer Working 2) -318,060.00 -416,670.00 -322,320.00 -1,057,050.00 Advertising -310,000.00 -310,000.00 -310,000.00 -930,000.00 Rent -29,000.00 -29,000.00 -29,000.00 -87,000.00 Salaries -128,000.00 -128,000.00 -128,000.00 -384,000.00 Commissions (Refer working note 3) -40,320.00 -61,320.00 -31,320.00 -132,960.00 Utilities -12,500.00 -12,500.00 -12,500.00 -37,500.00 Equipment Purchase 0.00 -21,500.00 -51,000.00 -72,500.00 Dividend Paid -23,250.00 0.00 0.00 -23,250.00 Total cash Disbursement -861,130.00 -978,990.00 -884,140.00 -2,724,260.00 Excess (Defficiency) of cash available over disbursement -89,130.00 157,510.00 507,360.00 453,740.00 Financing: Borrowings 150,130.00 0.00 0.00 150,130.00 Repayments (Refer working note 4) 0.00 -96,510.00 -53,620.00 -150,130.00 Interest (Refer working note 4)) 0.00 0.00 -3538.8 -3,538.80 Total Financing 150,130.00 -96,510.00 -57,158.80 -3,538.80 Ending Cash Balance 61,000.00 61,000.00 450,201.20 450,201.20Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.