Use the following information to prepare the July cash budget for Acco Co. It sh

Question

Use the following information to prepare the July cash budget for Acco Co. It should show expected cash receipts and cash payments for the month and the cash balance expected on July 31. Beginning cash balance on July 1: $67,000. Cash receipts from sales: 30% is collected in the month of sale, 50% in the next month, and 20% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual), $1,790,000; June (actual), $1,400,000; and July (budgeted), $1,420,000. Payments on merchandise purchases: 65% in the month of purchase and 35% in the month following purchase. Purchases amounts are: June (actual), $500,000; and July (budgeted), $570,000. Budgeted cash payments for salaries in July: $270,000. Budgeted depreciation expense for July: $15,000. Other cash expenses budgeted for July: $240,000. Accrued income taxes due in July: $80,000. Bank loan interest paid in July: $5,500.

Explanation / Answer

Answer:-1)-

Explanation:-

2)-

Acco Co. Cash Budget on July 31 Particulars Amount $ Opening balance (a) 67000 Cash Collection:- Receive from debtors 1484000 Total Cash Collection (b) 1484000 Cash Payments:- Payments on merchandise purchases 545500 Salaries 270000 Other expenses 240000 Accrued income taxes 80000 Bank loan interest 5500 Total cash payments (c) 1141000

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