Question

eBook Print 6 comte de Porto Cash Disbursement Timber Company is in the process of preparing its budget for next year. Cost of goods sold has been estimated at 70 percent of sales. Lumber purchases and payments are to be made during the month preceding the month of Sale Wages are estimated at 15 percent of sales and are paid during the month of sale Other operating costs amounting to 10 percent of sales are to be paid in the month following the month of sale. Additionally, a monthly lease payment of $24,000 is paid for computer services. Sales revenue is forecast as follows Month Sales Revenue 220,000 Required Prepare a schedule of cash disbursements for April May, and une. Do not use a negative sign with your answers Timber Company Schedule of Cash Disbursements April May, and june Lease paymer Check

Answer 1

Timber Company
Schedule of Cash Disbursements
April, May, And June
	April	May	June
Lumber Purchases                 [Refer working note 1]	$189,000	$175,000	$203,000
Wages                                    [Refer working note 2]	$34,500	$40,500	$37,500
Operating Expenses               [Refer working note 3]	$22,000	$23,000	$27,000
Lease Payments	$24,000	$24,000	$24,000
Total disbursements	$269,500	$262,500	$291,500

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Working note 1 - Payment for Lumber Purchases
	April	May	June	July
Sales                                                                                    (a)	$230,000	$270,000	$250,000	$290,000
Cost of Goods Sold (%)                                                      (b)	70%	70%	70%	70%
Cost of Goods Sold / Lumber purchases ($)                       (a x b)	$161,000	$189,000	$175,000	$203,000
Payment for lumber purchases:               [payments are to be made during the month preceding the month of sale.]
for May to be paid in April	$189,000
for June to be paid in May		$175,000
for July to be paid in June			$203,000

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Working note 1 - Payment of Wages
	April	May	June
Sales                                                                                  (a)	$230,000	$270,000	$250,000
Wages (%)                                                                         (b)	15%	15%	15%
Wages ($)    [paid during the month of sale]                      (a x b)	$34,500	$40,500	$37,500

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Working note 1 - Payment of operating expenses
	March	April	May	June
Sales                                                     (a)	$220,000	$230,000	$270,000	$250,000
Operating expenes (%)                        (b)	10%	10%	10%	10%
Operating expenses ($)                       (a x b)	$22,000	$23,000	$27,000	$25,000
Payment of operating expenses:           [paid in the month following the month of sale]
of March to be paid in April		$22,000
for April to be paid in May			$23,000
for May to be paid in June				$27,000