In: Accounting
Cash Budget
Wilson's Retail Company is planning a cash budget for the next
three months. Estimated sales revenue is as follows:
Month | Sales Revenue | Month | Sales Revenue |
---|---|---|---|
January | $300,000 | March | $200,000 |
February | 210,000 | April | 190,000 |
All sales are on credit; 60 percent is collected during the
month of sale, and 40 percent is collected during the next month.
Cost of goods sold is 70 percent of sales. Payments for merchandise
sold are made in the month following the month of sale. Operating
expenses total $41,000 per month and are paid during the month
incurred. The cash balance on February 1 is estimated to be
$20,000.
Prepare monthly cash budgets for February, March, and April.
Use negative signs only with beginning and ending cash balances, when appropriate. Do not use negative signs with disbursement answers.
Wilson's Retail Company Cash Budgets February, March, and April |
|||
---|---|---|---|
February | March | April | |
Cash balance, beginning | $Answer | $Answer | $Answer |
Total Cash receipts | Answer | Answer | Answer |
Cash available | Answer | Answer | Answer |
Total disbursements | Answer | Answer | Answer |
Cash balance, ending | $Answer | $Answer | $Answer |
Answer :
CASH BUDGET OF WILSON'S RETAIL COMPANY FOR 3 MONTHS
Particulars | February | March | April | |
A | Cash Balance at beginning of Month | $ 20,000 | $ 15,000 | $ 31,000 |
B | Sales | $ 2,10,000 | $ 2,00,000 | $ 1,90,000 |
Collection of Sales proceeds : | ||||
C | 60 % collect in same month | $ 1,26,000 | $ 1,20,000 | $ 1,14,000 |
D | 40 % collected in next month | $ 1,20,000 | $ 84,000 | $ 80,000 |
E | Total Sales Proceeds (C+D) | $ 2,46,000 | $ 2,04,000 | $ 1,94,000 |
COGS is 70 % of sales | ||||
F | COGS (B*70/100) | $ 1,47,000 | $ 1,40,000 | $ 1,33,000 |
G | Payment of COGS (Purchase) | $ 2,10,000 | $ 1,47,000 | $ 1,40,000 |
H | Operating Expenses | $ 41,000 | $ 41,000 | $ 41,000 |
I | Total Payment (G+H) | $ 2,51,000 | $ 1,88,000 | $ 1,81,000 |
O | Cash Balance at the End of Month [(A+E)-I] | $ 15,000 | $ 31,000 | $ 44,000 |