Question

Use the following information to prepare the July cash budget for Acco Co. It should show expected cash receipts and cash payments for the month and the cash balance expected on July 31. a. Beginning cash balance on July 1: $70,000. b. Cash receipts from sales: 25% is collected in the month of sale, 50% in the next month, and 25% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual). $1,930,000, June (actual), $1,190,000; and July (budgeted) $1,590,000. c. Payments on merchandise purchases: 50% in the month of purchase and 50% in the month following purchase. Purchases amounts are: June (actual). $420,000, and July (budgeted). $ 730,000. d. Budgeted cash payments for salaries in July: $190,000. e. Budgeted depreciation expense for July: $12,000. f. Other cash expenses budgeted for July: $240,000. g. Accrued income taxes due in July: $60,000 h. Bank loan interest paid in July: $7,000. Complete this question by entering your answers in the tabs below. Calculation Cash Budget Calculate the budgeted cash receipts and cash payments. Calculation of Cash Receipts from Sales Collected in July 31 Total Sales May June July Accounts Rec Credit sales from 1.930 000 1.100.000 1.590.000 $ 4,710,000 $ Calculation of Cash Payments for Merchandise July 31 Total Purchases June July Accounts Pay Purchases from 420.000 730,000 1,150,000 Totals $ $ 0 0 Po 1 of 5 Next >

Answer 1

					(All amounts in $)
Calculation of cash receipts from Sales
		Collected in			July 31
	Total sales	May	June	July	Accounts Rec.
Credit Sales from:
May	1,930,000	482,500	965,000	482,500	-
June	1,190,000		297,500	595,000	297,500
July	1,590,000			397,500	1,192,500
Total	4,710,000	482,500	1,262,500	1,475,000	1,490,000
Calculation of cash payments for merchandise
		Paid in			July 31
	Total purchases	June	July		Accounts Pay.
Credit Sales from:
June	420,000	210,000	210,000		-
July	730,000		365,000		365,000
Total	1,150,000	210,000	575,000		365,000
ACCO Co.
Cash Budget
For the month ended July 31
Opening cash balance			70,000
Receipts
Sales
May		482,500
June		595,000
July		397,500
			1,475,000
Total cash available			1,545,000
Cash payments for:
Purchases
June		210,000
July		365,000
Salaries		190,000
Other cash expenses		240,000
Accrued income taxes		60,000
Bank loan interest paid		7,000
Total cash payments			(1,072,000)
Cash Balance as at 31 July			473,000
Depreciation is a non cash expenditure