Here are some important figures from the budget of Nashville Nougats, Inc., for

Question

Here are some important figures from the budget of Nashville Nougats, Inc., for the second quarter of 2015: 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 2015, credit sales were $181,000 and credit purchases were $121,000 Using this information, complete the following cash budget:

Explanation / Answer

Nashville Nougats Inc. March April May June Credit Sales           181,000                  311,000       291,000        351,000 Credit Purchase           121,000                  119,000       142,000        167,000 Collection of Credit Sales March April May June Collection of Sales March              63,350                  108,600 Collection of Sales April                  108,850       186,600 Collection of Sales May       101,850        174,600 Collection of Sales June        122,850 Total collection from Sales              63,350                  217,450       288,450        297,450 Cash Budget for April-Jun Details April May June Opening Balance                  114,000          86,250        103,000 Cash Receipts Collection from Sales                  217,450       288,450        297,450 Total Available Cash                  331,450       374,700        400,450 Cash Disbursements Purchase                  121,000       119,000        142,000 Wages Taxes expenses                     43,100          10,600           62,100 Interest payment                     10,100          10,100           10,100 Equipment purchase                     71,000       132,000 Total Cash Disbursement                  245,200       271,700        214,200 Ending Cash Balance                     86,250       103,000        186,250

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