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

Question

Here are some important figures from the budget of Marston, Inc., for the second quarter of 2016: Credit sales Credit purchases Cash disbursements Wages, taxes, and expenses Interest Equipment purchases April May June $413,000 $362,000 $450,000 190,000 178,000 211,000 80,800 76,300 105,000 10,500 10,500 10,500 38,500 11,000 158,000 The company predicts that 5 percent of its credit sales will never be collected, 40 percent of its sales will be collected in the month of the sale, and the remaining 55 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase. In March 2016, credit sales were $340,000. Using this information, complete the following cash budget: (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) April May June Beginning cash balance $ 120,000 Cash receipts Cash collections from credit sales Total cash available Cash disbursements Purchases $ 182,000 Wages, taxes, and expenses Interest Equipment purchases Total cash disbursements Ending cash balance

Explanation / Answer

April May June Beginning cash balance 120000 160400 244550 Cash Receipts: Cash collected from customers 352200 371950 379100 (340000*55%+413000*40%) (413000*55%+362000*40%) (362000*55%+450000*40%) Total cash available 472200 532350 623650 Cash Payments: Purchase of inventory 182000 190000 178000 Wages taxes and expenses 80800 76300 105000 Interest 10500 10500 10500 Equipment purchase 38500 11000 158000 Total cash disbursement 311800 287800 451500 Closing balance 160400 244550 172150

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