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

Question

Here are some important figures from the budget of Cornell, Inc., for the second quarter of 2013:

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 $302,400, and credit purchases were $224,640. Use the above information to complete the following cash budget. (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required.)

Here are some important figures from the budget of Cornell, Inc., for the second quarter of 2013:

Explanation / Answer

where

cash collection from credit sales = previous months credit sales *.6 + current month credit sales * .35

Total cash avaliable = cash collection from credit sales + beginning cash balance

total cash disbursement = purchases + wages, taxes, and expense + interest + equipment purchases

Ending balance = total cash available - total cash disbursement

March sales= 302400 April May June   Beginning cash balance $ 4,03,200 $ 358344 $ 457690 Credit sales 547200 570240 630720     Cash collections from credit sales 372960 527904 562896     Total cash available $ 7,76,160 $ 8,86,248 $ 10,20,586   Cash disbursements     Purchases $ 224640 $ 211680 $ 252720     Wages, taxes, and expenses 57240 69422 72432     Interest 16416 16416 16416     Equipment purchases 119520 131040 0       Total cash disbursements $ 417816 $ 428558 $ 341568   Ending cash balance $ 3,58,344 $ 4,57,690 $ 6,79,018

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