Question

April May June July $710,000 $880,000 $590,000 $490,000 497,000 616,000 413,000 343,000 213,000 264,000 177,000 147,000 Sales Cost of goods sold Gross margin- Selling and administrative expenses: Selling expense Administrative expense Total selling and administrative expenses Net operating income 89,000 108,000 70,000 49,000 49,500 67,200 43,400 47,000 138,500 175,200 113,400 96,000 $ 74,500 $ 88,800 $ 63,600 $ 51,000 *Includes $31,000 of depreciation each month. b Sales are 20% for cash and 80% on account.

Answer 1

Required Budgets are as prepared below:

1
Sales Budget
For the quarter ended June 30,20XX
	Month
Particulars	April	May	June	Quarter
Sales	710,000	880,000	590,000	2,180,000
Total Sales	$710,000	$880,000	$590,000	$2,180,000
80% of sales	568,000	704,000	472,000
Schedule of expected Cash collections
For the quarter ended June 30,20XX
	Month
Particulars	April	May	June	Quarter
February Credit Sales (275,000*.8*20%)	44,000			44,000
March Credit Sales (290,000*.8*70%) (290,000*.8*.2)	162,400	46,400		208,800
April Cash Sales	142,000			142,000
April credit Sales	56,800	397,600	113,600	568,000
May cash sales		176,000		176,000
May Credit Sales		70,400	492,800	563,200
June Cash sales			118,000	118,000
June credit Sales			47,200	47,200
Total collections	405,200	690,400	771,600	1,867,200
2a.
Purchase Budget
For the quarter ended June 30,20XX
	Month
Particulars	April	May	June	Quarter
Cost of goods sold	497,000	616,000	413,000	1,526,000
Planned ending inventory (b)	123,200	82,600	68,600	68,600
Beginning inventory (c )	99,400	123,200	82,600	99,400
Total Purchases	$520,800	$575,400	$399,000	$1,495,200
2b.
Schedule of expected Cash payments
For the quarter ended June 30,20XX
	Month
Particulars	April	May	June	Quarter
Beginning Accounts Payable (a)	$130,900			$130,900
April Purchases (b)	$260,400	$260,400		$520,800
May Purchases (c )		$287,700	$287,700	$575,400
June Purchases (d)			$199,500	$199,500
Total payments (a+b+c+d)	$391,300	$548,100	$487,200	$1,426,600
3
Cash Budget
For the quarter ended June 30,20XX
	Month
Particulars	April	May	June	Quarter
Beginning Cash balance	60,000	40,400	40,500	60,000
Add: Budgeted Cash receipts	$405,200	$690,400	$771,600	$1,867,200
Cash available for use	$465,200	$730,800	$812,100	$1,927,200
Less: cash Disbursements
Purchase for Inventory	$391,300	$548,100	$487,200	$1,426,600
Selling expenses	89,000	108,000	70,000	267,000
Administration expenses	18,500	36,200	12,400	67,100
Land purchase		46,000		46,000
Dividend paid	38,000			38,000
Total disbusrement	536,800	738,300	569,600	1,844,700
Cash surplus/Deficit	-71,600	-7,500	242,500	82,500
Financing
Borrowing	112,000	48,000		160,000
Repayment			-160,000	-160,000
Interest			-2,720	-2,720
Net cash from Financing	112,000	48,000	-162,720	-2,720
Budgeted ending cash balance	40,400	40,500	79,780	79,780