Question

(5 points) In preparation for the quarterly cash budget, the following revenue and cost information have been compiled. Prepare and evaluate a cash budget for the month of October based on the information shown below. Sales 53 (XXX) Month August (actual) September (actual) October (forecast) Purchases $3,500,000 $2,000,000 $ 500.000 $4.500.000 $1.000.000 • The firm collects 60 percent of sales for cash and 40 percent of its sales one month later. • The firm pays cash for 40 percent of its purchases. The firm pays for 60 percent of its purchases the following month. • Salaries and wages amount to 15 percent of the preceding month's sales. • Lease payments of $100.000 must be made each month. • Depreciation expense each month of $45.000 • The firm has a beginning cash balance in October of $100,000 and maintains a minimum cash balance of $200.000

Answer 1

D B C 1 cash budget for the month of October 3 items sales 5 purcahse august september October 3,000,000.00 4,500,000.00 1,000,000.00 3,500,000.00 2,000,000.00 500,000.00 100,000.00 1,800,000.00 40% of the sale last month 600,000.00 60% of the sale current 2,400,000.00 8 opening balance 9 cash receipt 10 sales 11 sales 12 total receipt 13 cash payments 14 purchase 15 purchase 16 salaries wages 17 lease payment 18 total payments 200,000.00 40% of the purchase of current month 1,200,000.00 60% of the purchase of the previous month 675,000.00 100,000.00 2,175,000.00 20 closing balance 225,000.00 24 note:depreciation non cash item is not included in cash budget 25 closing balnce is more than minimum cash balance 200000

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в D 1 cash budget for the mo 3 items sales 5 purcahse august September October 3000000 4500000 1000000 3500000 2000000 500000 100000 =+C4*0.4 =+D4*0.6 =SUM(D10:011) 40% of the sale last month 60% of the sale current 8 opening balance 9 cash receipt 10 sales 11 sales 12 total receipt 13 cash payments 14 purchase 15 purchase 16 salaries wages 17 lease payment 18 total payments 40% of the purchase of current month 60% of the purchase of the previous month =+D5*0.4 =+C5*0.6 =+C4*0.15 100000 =SUM(D14:017) 19 20 closing balance =+D12-D18 24 note:depreciation non 25 closing balnce is more