Question

a quarterly basis. The co information is availab Cash Budget Nichole Mango, a mind quarter of 2011, ments for July through October 2011 able Cash budgeting for Nichole Mango, a merchandising firm, is performed on a quart pany is planning its cash needs for the third quarter of 2017, and the following info to assist in preparing a cash budget. Budgeted income statements for July through ember August Oct September $32,000 October $40.000 as follows: (17.000) July $22,000 (11.000) 11,000 $28,000 (15,000) 13,000 (21.000 15,000 19.000 Sales.... Cost of goods sold... Gross profit.......... Less other expenses Selling ..... Administrative.... 4,000 4,400 4,200 5,200 5,000 4.600 3,300 3,600 (6,900) $ 4,100 (9,000) $ 4,000 (8,600) $ 6,400 (9,800 $ 9,200 Total .... Net income.......... Additional information follows: 1. Other expenses, which are paid monthly, include $2,000 of depreciation per month. 2. Sales are 40 percent for cash and 60 percent on credit. 3. Credit sales are collected 25 percent in the month of sale, 65 percent one month after sale, and in percent two months after sale. May sales were $16,000, and June sales were $17,000. 4. Merchandise is paid for 50 percent in the month of purchase; the remaining 50 percent is paid in the following month. Accounts payable for merchandise at June 30 totaled $7,000. 5. The company maintains its ending inventory levels at 20 percent of the cost of goods to be sold in the following month. The inventory at June 30 is $2,200. 6. An equipment note of $6,000 per month is being paid through August. 7. The company must maintain a cash balance of at least $6,000 at the end of each month. The cash balance on June 30 is $6,100. 8. The company can borrow from its bank as needed. Borrowings and repayments must be in multiples of $100. All borrowings take place at the beginning of a month, and all repayments are made at the end of a month. When the principal is repaid, interest on the repayment is also paid. The interest rate is 12 percent per year. Chapter 9 Operational Budgeting and Profit Planning Required Prepare a monthly sch hly schedule of budgeted operating cash receipts for July August, and Septemb and a schedule of budgeted cash payments for purchases for e a monthly purchases budget and b. Prepare a mon ly, August, and September. onthly cash budget for July, August, and September. Show borrowings from the com od repayments to the bank as needed to maintain the minimum cash balance. c. Prepare a monthly pany's bank and rep Cash Budget lliams Supply Company selle foran

Answer 1

Answer with working notes is given below

Budgeted Sales Cash Sales Credit Sales July $22,000 $8,800 $13,200 August $28,000 $11,200 $16,800 September $32,000 $12,800 $19,200 Quarter $82,000 $32,800 $49,200 Schedule of Cash collected from Customers July August September Quarter Collection May sale- Credit Sales 60% of $16,000 ( $9,600)*10% June Sale - Total Credit Sales $17,000 * 60% = $10,200 July Sales August Sales September Sales Total Cash Collections $960 $6,630 $3,300 $1,020 $8,580 $4,200 $1,320 $10,920 $4,800 $17,040 $960 $7,650 $13,200 $15,120 $4,800 $41,730 $10,890 $13,800 a Monthly Schedule of Operating cash receipts Cash Sales Cash collections from customers Cash Receipts July $8,800 $10,890 $19,690 August $11,200 $13,800 $25,000 September $12,800 $17,040 $29,840 Quarter $32,800 $41,730 $74,530 b Purchase Budget Budgeted Unit Sales Add: Closing stock ( 20% of sale of following month) Total Needs Less Opening Stock Required Purchase (Value) July $11,000 $3,000 $14,000 $2,200 $11,800 August $15,000 $3,400 $18,400 $3,000 $15,400 September $17,000 $4,200 $21,200 $3,400 $17,800 Quarter | October | $43,000 $21,000 $4,200 $47,200 $2,200 $45,000 Closing stock for September-($21,000*20%) =$4,200 Schedule of Cash payment for purchases | August September July $7,000 $5,900 June Purchase July Purchase August Purchase September Purchase Total Cash Payments $5,900 $7,700 Quarter $7,000 $11,800 $15,400 $8,900 $43,100 $8,900 $16,600 $12,900 $13,600 Schedule for Operating Expense Selling and administration expenses Less: Depreciation Selling and administration expenses- Cash July $6,900 $2,000 $4,900 August $9,000 $2,000 $7,000 September $8,600 $2,000 $6,600 Quarter $24,500 $6,000 $18,500 Nichole Mango Cash Budget For the Three months Ended September 30, 2017 July August Opening Balance of Cash $6,100 $7,990 Receipt of Cash Collection from Customers $19,690 $25,000 Cash available for disbursement $25,790 $32,990 September $6,090 Quarter $6,100 $29,840 $35,930 $74,530 $80,630 $12,900 $4,900 $16,600 $6,600 $13,600 $7,000 $18,000 $38,600 -$5,610 $43,100 $18,500 $18,000 $79,600 $1,030 $17,800 $7,990 $23,200 $12,730 Merchandise purchase Monthly Operating expenses Equipment note Cash paid for disbursements Net Cash available Financing Borrowings (at the beginning of the month) Repayments at the end of quarter) Interest (at 1% per month) Total financing Closing cash balance $11,700 -$6,500 $130 $6,630 $6,100 $11,700 $6,500 -$130 $5,070 $6,100 $0 $7,990 $11,700 $6,090 Interest on short term borrowing @1% per month Month Repayment Interest | September $6,500 $130 Interest for 2 month $130