Bill Johnson's Company Sales for January, February, and March are expected to be $200,000, $210,000, and...

Bill Johnson's Company Sales for January, February, and March are expected to be $200,000, $210,000, and $190,000, respectively. All sales are on account and are collected 50% in the month of the sale and 45% in the following month. The remaining 5% is determined to be uncollectible. Raw materials are purchased one month before being needed, and all purchases and expenses are paid for as incurred. The cash balance at February 1 is $8,750. Activities for January, February, and March are expected to be:

	January	February	March
Sales	$200,000	$210,000	$190,000
Raw materials used	$40,000	$36,000	$44,000
Salaries	$80,000	$85,000	$75,000
Maintenance and repairs	$18,000	$18,000	$18,000
Depreciation	$36,000	$36,000	$36,000
Utilities and other	$15,000	$15,000	$15,000
Dividends paid	$0	$10,000	$0
Payment on bonds	$8,000	$8,000	$8,000

Directions: Prepare a cash budget for the month of August 2020.

Do not enter dollar signs or commas in the input boxes.
Do not use the negative sign.

Bill Johnson's Company Cash Budget For the month ended February 31, 2020
Receipts:
Cash collections on July sales	$Answer
Cash collections on August sales	$Answer
Total Cash Receipts		$Answer
Disbursements:
Cash used to purchase raw materials for September	$Answer
Cash used to pay salaries	$Answer
Cash used to pay for maintenance and repairs	$Answer
Cash used to pay for utilities	$Answer
Cash used to pay dividends	$Answer
Cash used to pay toward bond payable balance	$Answer
Total Cash Disbursements		$Answer
Beginning cash balance		$Answer
Cash inflow		$Answer
Cash outflow		$Answer
Ending cash balance		$Answer

Solutions

Expert Solution

Cash Budget is prepared for the month of February as given in the table but not as per the one stated for August as there is no data relating to August but data relating to February is available.

Bill Johnson's Company
Cash Budget
For the month ended February 31, 2020
Receipts:
Cash collections on January sales ($200,000*45/100)	$90,000
Cash collections on February sales ($210,000*50/100)	$105,000
Total Cash Receipts		$195,000
Less: Disbursements:
Cash used to purchase raw materials for March	$44,000
Cash used to pay salaries	$85,000
Cash used to pay for maintenance and repairs	$18,000
Cash used to pay for utilitites	$15,000
Cash used to pay dividends	$10,000
Cash used to pay toward bond payable balance	$8,000
Total Cash Disbursements		$180,000
Beginning cash balance		$8,750
Cash inflow ($195,000 - $180,000 + $8,750)		$23,750
Cash outflow		$0
Ending cash balance		$23,750

ekkarill92 answered 1 year ago

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