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. a. Beginning cash balance on July 1: $68,000 b. Cash receipts from sales: 35% is collected in the month of sale, 50% in the next month and 15% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual) $1,880,000: June (actual). $1,440,000; and July (budgeted) $1,520,000. c. Payments on merchandise purchases: 55% in the month of purchase and 45% in the month following purchase. Purchases amounts are: June (actual), $470,000; and July (budgeted) $620,000 d. Budgeted cash payments for salaries in July: $310,000. e. Budgeted depreciation expense for July: $10,000. f. Other cash expenses budgeted for July: $290,000. g. Accrued income taxes due in July: $70,000. h. Bank loan interest paid in July: $9,500. Complete this question by entering your answers in the tabs below. Calculation Cash Budget Calculate the budgeted cash receipts and cash payments. Calculation of Cash Receipts from Sales Collected in- June July 31 Accounts Rec. July Total Sales May Credit sales from $ MAV 1 An Onn

Answer 1

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Calculation of Cash Receipts from Sales
		Collected IN	Jul-31
	Total Sales	May	Jun	Jul	Account Receivables
Credit Sales from:
May	1880000	6,58,000	9,40,000	2,82,000
Jun	1440000		5,04,000	7,20,000	2,16,000
Jul	1520000	-	-	5,32,000	9,88,000
Total	4840000	658000	1444000	1534000	1204000
Calculation of Cash Payment for Merchandise
		paid in	Jul-31
	Total Purchases		Jun	Jul	Account Payables
Purchases from:
Jun	470000		2,58,500	2,11,500	-
Jul	620000		-	3,41,000	2,79,000
Total	1090000		258500	552500	279000

Acco Co.
Cash Budget
For the month ended Jul 31
Opening Cash Balance	68000
Cash Receipts from Sales	1534000
Total Cash Available		1602000
Cash Payments for:
Cash payment for merchandise	552500
Salaries Expenses	310000
Other Cash Expenses	290000
Bank Loan Interest	9500
Total Cash Payments:		1162000
Closing Cash Balance		440000

Note: Depreciation is non cash expense so not included.

Note: Income tax is due, but payment information not given in the question.