Question

1. Here are some important figures from the budget on Portant figures from the budget of Cornell, Inc., for the second quarter of 2017 April $601,900 232,850 May $627,300 277,900 June $693,790 317,380 1 Credit sales Credit purchases Cash disbursements Wages, taxes, and expenses Interest Equipment purchases 62,964 18,058 131,400 76,364 18,058 144,200 79,670 18,058 0 The company predicts that 5 percent of its credit sales will never be collected, 35 percent of its sales will be collected in the month of the sale, and the remaining 60 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase. In March 2017, credit sales were $332,640, and credit purchases were $247,100. Using this information, complete the following cash budget: April $443,500 Beginning cash balance Cash receipts Cash collections from credit sales Total cash available Cash disbursements Credit purchases Wages, taxes, and expenses Interest Equipment purchases Total cash disbursements Ending cash balance

Answer 1

Solution :-

	Cash budget
				April	May	June
Beginning Cash Balance				$443,500	$707,997	$1,290,477
Cash Receipts
	Cash Collection of Credit Sales			$280,519	345954	374559.5
	Total Cash Available			$724,019	$1,053,951	$1,665,036
Cash Disbursements
	Credit Purchase			247100	232850	277900
	Wages , Taxes and Expenses			62964	76364	79670
	Interest			18058	18058	18058
	Equipment Purchase			131400	144200
	Total Cash Disbursements			459522	471472	375628
Ending Cash Balance				$707,997	$1,290,477	$2,579,885

Working Notes :-

(1)

Particulars		March	April	May	June
Credit sales		$332,640	$601,900	$627,300	$693,790
Receip of Credit sale
35% in same month		$116,424	$210,665	$219,555	$242,827
60% in following Month			$69,854.40	$126,399.00	$131,733.00
Total Receipts of Credit Sales			$280,519.40	$345,954.00	$374,559.50

(2) In case of Payment to Credit Purchase we take the purchase of Previous month exactly

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