Question

May June Quarter Earrings Unlimited Cash Budget For the Three Months Ending June 30 April Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Merchandise purchases Advertising Rent Salaries Commissions Utilities Equipment purchases Dividends paid Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance

Answer 1

Required budgets are as prepared below:

Earings unlimited
Cash Budget
For the quarter ended June 30
	Month
Particulars	April	May	June	Total
Beginning Cash balance	80,000	56,472	320,684	80,000
Add: Collection from customers	$716,800	$1,131,200	$1,403,200	$3,251,200
cash available for use	$796,800	$1,187,672	$1,723,884	$3,331,200
Less: cash Disbursements
Merchandise purchase	$290,460	$371,220	$286,120	947,800
Advertising	260,000	260,000	260,000	780,000
Rent	24,000	24,000	24,000	72,000
Salaries	118,000	118,000	118,000	354,000
Commissions	42,368	64,768	32,768	139,904
Utilities	10,000	10,000	10,000	30,000
Equipment purchase		19,000	46,000	65,000
Dividend paid	19,500			19500
Total disbusrement	764,328	866,988	776,888	2,408,204
Cash surplus/Deficit	32,472	320,684	946,996	922,996
Financing
Borrowing	24,000			24,000
Repayment			-24,000	-24,000
Interest			-720	-720
Net cash from Financing	24,000	0	-24,720	-720
Budgeted ending cash balance	56,472	320,684	922,276	922,276
Earings Unlimited
Budgeted Income Statement
For the three month ended June 30
Particulars	Amount ($)	Amount ($)
Sales		3,497,600
Less: Cost of goods sold (218,600*4.6)		1,005,560
Variable expenses:
Commissions	139,904
Interest expense	720
Insurance (3,600*3)	10,800
		151,424
Contribution Margin		2,340,616
Fixed Expenses:
Advertising	780,000
Rent	72,000
Salaries	354,000
Depreciation (20,000*3)	60,000
Utilities	30,000	1,296,000
Net operating Income		1,044,616
Earings Unlimited
Budgeted balance Sheet
Jun-30
Assets
Cash	922,276
Accounts Receivable	817,280
Inventory (12,480*4.6)	57,408
Property and equipment Net (1,010,000+19,000+46,000-60,000)	1,015,000
Prepaid insurance (24,000-10,800)	13,200
Total assets	2,825,164
Liabilities and Stockholders' Equity
Accounts Payable purchases	99,360
Dividend payable	19,500
Common Stock	920,000
Retained earnings (761,188+1,044,616-19,500)	1,786,304
Total liabilities and stockholders' equity	2,825,164