ReddingCompany_Cash Budget

Question # 00001941 Posted By: ACCOUNTS_GURU Updated on: 10/05/2013 05:24 AM Due on: 12/31/2013
Subject Accounting Topic Accounting Tutorials:
Question
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2. ReddingCompanyhasbudgetedsalesrevenuesasfollows:

June

July

August

Creditsales

135,000

145,000

90,000

Cashsales

90,000

255,000

195,000

Totalsales

225,000

400,000

285,000

Pastexperienceindicatesthat60%ofthecreditsaleswillbecollectedinthemonthofsaleandthe remaining40%willbecollectedinthe followingmonth.Purchasesofinventoryarealloncreditand50% ispaidinthemonthofpurchaseand50%inthemonthfollowingpurchase.Budgetedinventory purchasesare:

June

300,000

July

250,000

August

105,000

Othercashdisbursementsbudgeted:(a)sellingand administrativeexpensesof$48,000 each month,(b)

dividendsof$105,000 willbepaidinJuly,and(c) purchaseofequipmentin Augustfor$30,000 cash. Thecompanywishestomaintaina minimumcashbalanceof$50,000 attheendofeachmonth.

Instructions

PrepareacashbudgetforthemonthsofJulyandAugust.

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  1. Tutorial # 00001776 Posted By: ACCOUNTS_GURU Posted on: 10/05/2013 05:27 AM
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