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ReddingCompany_Cash Budget

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solution


Question

Question;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.

 

Paper#44597 | Written in 18-Jul-2015

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