In: Accounting
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 $14,000 is paid for computer services. Sales revenue is forecast
as follows
Month | Sales Revenue |
---|---|
February | $170,000 |
March | 210,000 |
April | 220,000 |
May | 260,000 |
June | 240,000 |
July | 280,000 |
Required
Prepare a schedule of cash disbursements for April, May, and
June.
Do not use a negative sign with your answers.
Timber Company | |||
---|---|---|---|
Schedule of Cash Disbursements | |||
April, May, and June | |||
April | May | June | |
Lumbers purchases | $Answer | $Answer | $Answer |
Wages | Answer | Answer | Answer |
Operating expenses | Answer | Answer | Answer |
Lease payment | Answer | Answer | Answer |
Total disbursements | $Answer | $Answer | $Answer
|
ANSWER:-
Timber Company | |||
Schedule of Cash Disbursements | |||
April May & June | |||
April | May | June | |
Lumbers Purchases | $182,000 | $168,000 | $196,000 |
Wages | $33,000 | $39,000 | $36,000 |
Operating Expenses | $21,000 | $22,000 | $26,000 |
Lease Payment | $14,000 | $14,000 | $14,000 |
Total Disbursements | $250,000 | $243,000 | $272,000 |
Workings:-
Lumbers Purchases Calculation | =260000*70/100(260000*70%) | =240000*70% | =280000*70% |
Wages Calculation | =220000*15/100(220000*15%) | =220000*15% | =240000*15% |
Operating Expenses Calculation | =210000*10/100(210000*10%) | =220000*10% | =260000*10% |
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