Question

1. Smith Company has budgeted activity for December using the following data:

2. Cash sales	$25,000
   Credit sales (60% collected in month of sale)	380,000
   Selling and administrative costs (including depreciation)	50,000
   Depreciation expense	5,000
   Merchandise Inventory, December 1	21,000
   Merchandise Inventory, December 31	20,000
   Beginning cash balance	3,000
   Minimum cash balance required	2,500
   Cost of goods sold is 55% of Cooper’s selling price
   All purchases are paid in cash
   Selling and administrative costs are paid in month of purchase

   Prepare a cash budget for December

3. Beginning Cash balance $3,000

4. Cash Receipts $253,000

5. Total Cash Available to Spend $256,000

6. Material Purchased (Not sure how to calculate)

7. Selling and Administrative Expenses $45,000

8. Total cash disbursements (Total after calculating Materials Purchased)

9. Cash Excess Needed (Not sure how to calculate)

10. Borrowing (Not sure how to calculate)

11. Ending Cash Balance (Calculate after know Cash Excess and Borrowing)

12. How is Material Purchased, Cash Excess and Borrowing Calculated?

Answer 1

ArYCt.ase CUo5ooo * 55%) -20000-21000:22r7 50 qinin Cash 3o60 53060 25 6000 221750 Setieg and ad aini stafve epence 15 000 (50000 50co) Total cosh payment 266 750 10750 3250 aloince EnCosh batane 25O0