Here are some important figures from the budget of Blocher, Inc., for the second

Question

Here are some important figures from the budget of Blocher, Inc., for the second quarter of 2013: April May June Credit sales $ 407,000 $ 356,000 $ 444,000 Credit purchases 184,000 172,000 205,000 Cash disbursements Wages, taxes, and expenses 80,200 75,700 104,400 Interest 9,900 9,900 9,900 Equipment purchases 35,500 8,000 152,000 The company predicts that 5 percent of its credit sales will never be collected, 30 percent of its sales will be collected in the month of the sale, and the remaining 65 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase. In March 2013, credit sales were $334,000. Required: Using this information, complete the following cash budget: April May June Beginning cash balance $ 114,000 $ $ Cash receipts Cash collections from credit sales Total cash available $ $ $ Cash disbursements Purchases $ 176,000 $ $ Wages, taxes, and expenses Interest Equipment purchases Total cash disbursements $ $ $ Ending cash balance $ $ $

Explanation / Answer

March April May June Credit sales $334,000.00 $ 407,000.00 $ 356,000.00 $    444,000.00 Credit purchases $ 184,000.00 $ 172,000.00 $    205,000.00 Cash disbursements Wages, taxes, and expenses $    80,200.00 $    75,700.00 $    104,400.00 Interest $      9,900.00 $      9,900.00 $         9,900.00 Equipment purchases $    35,500.00 $      8,000.00 $    152,000.00 calculation of cash collections from credit sales April May June 65 % of the credit sales of the previous month $ 217,100.00 $ 264,550.00 $    231,400.00 30 % of the credit sales of the current month $ 122,100.00 $ 106,800.00 $    133,200.00 Total $ 339,200.00 $ 371,350.00 $    364,600.00 April    May June   Beginning cash balance $ 114,000.00 $ 151,600.00 $    245,350.00 Cash receipts Cash collections from credit sales $ 339,200.00 $ 371,350.00 $    364,600.00 Total cash available $ 453,200.00 $ 522,950.00 $    609,950.00 Cash disbursements Purchases $ 176,000.00 $ 184,000.00 $    172,000.00 Wages, taxes, and expenses $    80,200.00 $    75,700.00 $    104,400.00 Interest $      9,900.00 $      9,900.00 $         9,900.00 Equipment purchases $    35,500.00 $      8,000.00 $    152,000.00 Total cash disbursements $ 301,600.00 $ 277,600.00 $    438,300.00 Ending cash balance $ 151,600.00 $ 245,350.00 $    171,650.00

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