Question

Castor, Inc., is preparing its master budget for the quarter ended June 30. Budgeted sales and cash payments for merchandise for the next three months follow: Budgeted April May June Sales $ 30,900 $ 41,100 $ 25,100 Cash payments for merchandise 22,400 15,700 16,100 Sales are 70% cash and 30% on credit. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $13,100 in cash, $13,100 in accounts receivable, $11,000 in accounts payable, and a $3,100 balance in loans payable. A minimum cash balance of $13,100 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 2% per month based on the beginning of the month loan balance and is paid at each month-end. If an excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and include sales commissions (5% of sales), shipping (4% of sales), office salaries ($4,100 per month), and rent ($6,100 per month). Prepare a cash budget for each of the months of April, May, and June. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.)

Answer 1

**sales budget cash sales (70%) credit sales (30%) Total Budgeted Sales April May June Quarter 21630 28770 17570 67970 9270 12330 7530 29130 30900 41100 25100 97100 CASTOR, INC. Cash Budget April, May, and June April May June Beginning cash balance 13100 13100 17652 cash sales** 2163028770 17570 collection on account** 13100 9270 12330 Total cash available 47830 51140 47552 Cash disbursements: Merchandise 22400 15700 16100 Sales commissions 1545 2055 1255 shipping 1236 1644 1004 office salaries 4100 4100 4100 6100 61000 6100 Loan interest 62 760 Total cash payments 35443 29675 28559 - Preliminary cash balance 1238721465 18993 Additional loan (loan repayment) 713 -3813 - Ending cash balance 13100 17652 18993 Rent Loan balance June Loan balance - Beginning of month - Additional loan (loan repayment) - Loan balance - End of month April May 31000 3813 713 -3813 3813 0 0 0 + Sheet 76 Sheet77Sheet78 Sheet79 Sheet80 Sheet81 Sheet82 Sheet83 Sheet84 Sheet85 - ll ENG US 14:00 06/11/2019