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.

1. Beginning cash balance on July 1: $67,000.
2. Cash receipts from sales: 40% is collected in the month of sale, 50% in the next month, and 10% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are May (actual), $1,770,000; June (actual), $1,310,000; and July (budgeted), $1,380,000.
3. Payments on merchandise purchases: 80% in the month of purchase and 20% in the month following purchase. Purchases amounts are: June (actual), $590,000; and July (budgeted), $470,000.
4. Budgeted cash payments for salaries in July: $210,000.
5. Budgeted depreciation expense for July: $13,000.
6. Other cash expenses budgeted for July: $290,000.
7. Accrued income taxes due in July: $90,000.
8. Bank loan interest paid in July: $7,500.

Complete this question by entering your answers in the tabs below.

• Calculation: Calculate the budgeted cash receipts and cash payments.
• Cash Budget: Prepare the July cash budget for Acco Co.

Answer 1

@ The budgeted cash receipt for July is as follows Budged caph Receipt 404 cash receipt for sale: 40% is collected in th month of sale 552000 50% is collected in the next month 655000 10% is collected in the second month 177000 after sale 13,84000 6 The budgeted cash payment for july is as follows - Budgeted cash payment payment en muchandise purchase. 4 80% payment is made in the month 376000 of purchase 20% payment is made in the month 1118000 of fallaceing parehase 494000 for Acc Co. is & The july cash budget tas follows: 6 7000) Begining eash balance an july 1 thflow: cash receipt from sale Total inflow 1784000 14,51,000 I out how payment on merchandise purchase Radged cash payment for salaries other cash expenses payment Income tax payment Rank loan interest paid Total out How (494000 1(21000o) (290000) (90,000 (7500) 11091,500 Ending cash balancu on jul 31 1359,500 taken in cash budget because Deprecation is not taken in cash hudo it is non- cash transaction