P3. Cash budget _Grenoble Enterprises

Question # 00003711 Posted By: ACCOUNTS_GURU Updated on: 11/19/2013 01:23 AM Due on: 12/31/2013
Subject Accounting Topic Accounting Tutorials:
Question
P3. Cash budget – Basic Grenoble Enterprises had sales of \$50,000 in March and \$60,000 in April. Forecast sales for May, June, and July are \$70,000, \$80,000, and \$100,000, respectively. The firm has a cash balance of \$5,000 on May 1 and wishes to maintain a minimum cash balance of \$5,000. Given the following data, prepare and interpret a cash budget for the months of May, June, and July. 1) The firm makes 20% of sales for cash, 60% are collected in the next month, and the remaining 20% are collected in the second month following sale. 2) The firm receives other income of \$2,000 per month. 3) The firm’s actual or expected purchases, all made for cash, are \$50,000, \$70,000, and \$80,000 for the months of May through July, respectively. 4) Rent is \$3,000 per month. 5) Wages and salaries are 10% of the previous month’s sales. 6) Cash dividends of \$3,000 will be paid in June. 7) Payment of principal and interest of \$4,000 is due in June. 8) A cash purchase of equipment costing \$6,000 is scheduled in July. 9) Taxes of \$6,000 are due in June.
Tutorials for this Question
1. Solution: P3. Cash budget _Grenoble Enterprises

Tutorial # 00003523 Posted By: ACCOUNTS_GURU Posted on: 11/19/2013 01:25 AM
Puchased By: 2
Tutorial Preview
The solution of P3. Cash budget _Grenoble Enterprises...
Attachments
P3._Cash_budget__Grenoble_Enterprises_.xlsx (10.31 KB)

Great! We have found the solution of this question!