Cash Budget Wilson\'s Retail Company is planning a cash budget for the next thre
ID: 2565417 • Letter: C
Question
Cash Budget
Wilson's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows:
All sales are on credit; 60 percent is collected during the month of sale, and 40 percent is collected during the next month. Cost of goods sold is 70 percent of sales. Payments for merchandise sold are made in the month following the month of sale. Operating expenses total $44,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $20,000.
Prepare monthly cash budgets for February, March, and April.
Use negative signs only with beginning and ending cash balances, when appropriate. Do not use negative signs with disbursement answers.
Month Sales Revenue Month Sales Revenue January $300,000 March $200,000 February 230,000 April 165,000Explanation / Answer
Wilson's Retail Company Cash Budgets February, March, and April February March April Cash balance, beginning 20000 24000 31000 Total Cash receipts 258000 212000 179000 Cash available 278000 236000 210000 Total disbursements 254000 205000 184000 Cash balance, ending 24000 31000 26000
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