Here are some important figures from the budget of Marston, Inc., for the second
ID: 2572502 • Letter: H
Question
Here are some important figures from the budget of Marston, Inc., for the second quarter of 2016 April Credit sales Credit purchases Cash disbursements May $413,000 $362,000 $450,000 190,000 178,000 211,000 Wages, taxes, and expenses Interest 80,800 76,300 105,000 10,500 38,500 11,000 158,000 10,500 10,500 Equipment purchases The company predicts that 5 percent of its credit sales will never be collected, 40 percent of its sales will be collected in the month of the sale, and the remaining 55 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase. In March 2016, credit sales were $340,000 Using this information, complete the following cash budget: (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) April May June S 120,000 Beginning cash balance Cash receipts Cash collections from credit sales Total cash available Cash disbursements $ 182,000 Purchases Wages, taxes, and expenses Interest Equipment purchases Total cash disbursements Ending cash balanceExplanation / Answer
Particulars
April
May
June
Beginning cash Balance
120000
160400
244550
Cash receipts
Cash collection from credit sales
Total cash available
340000*55% + 413000*40% = 187000+165200 = 352200
362000*40%+413000*55% = 144800+227150 = 371950
450000*40%+362000*55% = 180000+199100 = 379100
Cash disbursements
Purchases
182000
190000
178000
Wages Taxes and Expenses
80800
76300
105000
Interest
10500
10500
10500
Equipment Purchase
38500
11000
158000
Total cash disbursements
311800
287800
451500
Ending cash balance
160400
244550
172150
Particulars
April
May
June
Beginning cash Balance
120000
160400
244550
Cash receipts
Cash collection from credit sales
Total cash available
340000*55% + 413000*40% = 187000+165200 = 352200
362000*40%+413000*55% = 144800+227150 = 371950
450000*40%+362000*55% = 180000+199100 = 379100
Cash disbursements
Purchases
182000
190000
178000
Wages Taxes and Expenses
80800
76300
105000
Interest
10500
10500
10500
Equipment Purchase
38500
11000
158000
Total cash disbursements
311800
287800
451500
Ending cash balance
160400
244550
172150
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