Question

Prepare Cash Budget from Budgeted Transactions Prepare a cash budget for the month ended May 31, 2019. Campton Company anticipates a cash balance of $91,000 on May 1, 2019. The following budgeted transactions for May 2019 present data related to anticipated cash receipts and cash disbursements: 1. For May, budgeted cash sales are $67,000 and budgeted credit sales are $507,000. (Credit sales for April were $450,000.) In the month of sale, 40% of credit sales are collected, with the balance collected in the month following sale. 2. Budgeted merchandise purchases for May are $287,000. (Merchandise purchases in April were $240,000.) In the month of purchase, 70% of merchandise purchases are paid for, and the balance is paid for in the following month. 3. Budgeted cash disbursements for salaries and operating expenses for May total $172,000 4. During May, $25,000 of principal repayment and $4,000 of interest payment are due to the bank. 5. A $20,000 income tax deposit is due to the federal government during May. 6. A new delivery truck will be purchased during May for $7,500 cash and an $8,000 note payable. Depreciation for May will be $535. Prepare a cash budget for Campton Company for the month of May 2019.

Answer 1

Cash Budget (May 31, 2019)
Beginning Cash Balance	$        91,000
Cash Receipts :
Cash Sales	$        67,000
Collections on credit sales	$     4,72,800	=507000*40%+450000*60%
Cash Available	$     6,30,800
Cash Disbursements
Payments for merchandise	$     2,72,900	=287000*70%+240000*30%
Salaries and operating expense payments	$     1,72,000
Principal and interest payment	$        29,000	=25000+4000
Income tax deposit	$        20,000
Payment on truck	$          7,500
Total Cash Disbursements	$     5,01,400
Ending Cash Balance	$     1,29,400