Question

The city of Charleston had the following sales of water for the selected months of 2017 Month February March April May Junc Sales $60,000 45,000 60,000 42,500 100,000 July 120,000 All sales are on credit. Historically, 60 percent is collected in the month of sale, 30 percent during the first month following the sale, and 10 percent in the second month following the sale. Water purchases by month are as follows: Month February 560,000 March 40,000 April 45,000 May 59,750 June 52,500 July 90.000

Answer 1

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Charleston
Budgeted cash collections		April	May	June	2nd Qtr. Total
Total Sales		60,000.00	42,500.00	100,000.00	202,500.00	A
60% of sale in the same month		36,000.00	25,500.00	60,000.00	121,500.00	B=50% of A
30% of sale in the next month		-	18,000.00	12,750.00	30,750.00	C= 30% of A of previous month,
10% of sale in the second month		-	-	6,000.00	6,000.00	D= 10% of A of previous to previous month.
Collection of February sales		6,000.00	-	-	6,000.00	Last 10% of February sales $ 60,000 will be collected in April.
Collection of March sales		13,500.00	4,500.00	-	18,000.00	30% of March sales $ 45,000 collected in April and 10% will be collected in may..
Budgeted cash collections		55,500.00	48,000.00	78,750.00	182,250.00	E
Water Disbursements	March	April	May	June	2nd Qtr. Total
Expenses on Water	40,000.00	45,000.00	59,750.00	52,500.00	157,250.00	F
Water Disbursements		40,000.00	45,000.00	59,750.00	144,750.00	G= F of pervious month
Budget cash payments for operating costs		April	May	June	2nd Qtr. Total
Operating costs (excl. depreciation)		10,000.00	10,000.00	10,000.00	30,000.00	H
Budget cash payments for operating costs		10,000.00	10,000.00	10,000.00	30,000.00	H
Answer 3
Cash budget		April	May	June	2nd Qtr. Total
Beginning Cash Balance		5,000.00	10,500.00	10,500.00
Cash collections		55,500.00	48,000.00	78,750.00	182,250.00	See E
Water Disbursements		40,000.00	45,000.00	59,750.00	144,750.00	See G
Operating costs		10,000.00	10,000.00	10,000.00	30,000.00	See H
Borrowings			7,000.00		7,000.00	I
Repayments				7,000.00	7,000.00	J
Interest				175.00	175.00	K= I*15%*2/12
Ending cash balance		10,500.00	10,500.00	12,325.00		L= E-G-H+I-J-K