Here are some important figures from the budget of Merrick Inc for the second qu

Question

Here are some important figures from the budget of Merrick Inc for the second quarter 2014. April May June Credit sales $312,000 $291,200 $350,400 Credit purchases 118,240 141,040 166,800 Cash disbursements Wages, taxes, and expenses 43,040 10,800 62,640 Interest 10,480 10,480 10,480 Equipment purchases 74,000 135,000 0 The company predicts that 5 percent of its credit sales will never be collected, 35 percent of its sales will be collected in the month of the sale, and the remaining 60 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 $196,000, and credit purchases were $134,000. Using this information, complete the following cash budget: April May June Beginning cash balance Cash receipts Cash collections from credit sales Total cash available Cash disbursements Purchases Wages, taxes, and expenses Interest Equipment purchases Total cash disbursements Ending cash balance $112,000

Explanation / Answer

April May June Beg. cash bal 112000 77280 91880 cash receipts 109200 101920 122640 cash collections from cr sales 117600 187200 174720 total cash available 338800 366400 389240 cash disbursements purchase 134000 118240 141040 wages,taxes expense 43040 10800 62640 interest 10480 10480 10480 equipment purchases 74000 135000 0 total cash disbursements 261520 274520 214160 ending cash bal 77280 91880 175080

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