Question

In: Accounting

Cash Budget Wilson's Retail Company is planning a cash budget for the next three months. Estimated...

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 205,000 April 185,000

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 80 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 $40,000.

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
Total Cash receipts
Cash available
Total disbursements
Cash balance, ending

Solutions

Expert Solution

Wilson Retail Company
Cash Budgets
February March April
Cash balance beginning                            40,000                   2,000                    -1,000
Total cash receipts                         2,43,000              2,02,000                 1,91,000
Cash available                         2,83,000              2,04,000                 1,90,000
total disbursements                         2,81,000              2,05,000                 2,01,000
Cash balance ending                              2,000                  -1,000                  -11,000
Total cash receipts
($205,000 * 60%)+($300,000*40%) = $243,000
($205,000 * 40%)+ ($200,000 * 60%) = $202,000
($185,000 * 60%)+ ($200,000 * 40%) = $191,000
total disbursements
$41,000 + ($300,000 * 80%) = $281,000
$41,000 + ($205,000 * 80%) = $205,000
$41,000 + ($200,000 * 80%) = $201,000

Related Solutions

Cash Budget Wilson's Retail Company is planning a cash budget for the next three months. Estimated...
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 205,000 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...
Cash Budget Wilson's Retail Company is planning a cash budget for the next three months. Estimated...
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 205,000 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...
Cash Budget Wilson's Retail Company is planning a cash budget for the next three months. Estimated...
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 245,000 April 155,000 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...
Koshy Company is planning a cash budget for the next three months. Estimated sales revenue is:...
Koshy Company is planning a cash budget for the next three months. Estimated sales revenue is: Month Revenue Month Revenue January $175,000 March $125,000 February 150,000 April 100,000 Month Sales Revenue Month Sales Revenue 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 80 percent of sales. Payments for merchandise sold are made in the month following the month of sale....
Now that a business has prepared it budget for the next three months, and the budget...
Now that a business has prepared it budget for the next three months, and the budget indicated that there will be cash shortage (negative cash balance at the end of the month, mainly due to the large total cash payments in the month than the total cash receipts) in the second month.What actions should the managers take when he is presented with this information? What actions should the managers make if in the third month, there will be a cash...
Galaxy Lighting Company manufactures and sells lighting fixtures. Estimated sales for the next three months are:...
Galaxy Lighting Company manufactures and sells lighting fixtures. Estimated sales for the next three months are: September $ 350,000 October $ 500,000 November $ 400,000 Sales for August were $400,000 and December is estimated as $420,000. All sales are on account. Galaxy Lighting Company estimates that 80% of the accounts receivable are collected in the month of sale with the remaining 20% collected the following month. The units sell for $40 each. Generally, 60% of purchases are due and payable...
PROBLEM 1: Felix Company wants to forecast its cash budget for the next 3 months. *...
PROBLEM 1: Felix Company wants to forecast its cash budget for the next 3 months. * Estimated sales revenues are: Month Revenue January $        200,000 February $        150,000 March $        300,000 April $        400,000 All sales are on credit and are estimated to be paid as follows: Month of Sale 60% Month after sale 40% 100% * Cost of goods sold as a percentage of sales is 75% * Payments for merchandise sold are made in the month following the...
Bent Company, a retail organization, has just begun operations. Expected sales for the next three months...
Bent Company, a retail organization, has just begun operations. Expected sales for the next three months are 2000, 2500, and 3000 units. Bent Company purchases for $50 per unit the sole product it sells, and sells that product for $80 per unit. Bent Company makes all sales on credit and collects 40% of each month’s sales in the month of sale and 60% in the following month. Planned purchases in the next three month’s are 3200, 2700, and 2900 units....
-Company A's free cash flow is estimated to be $75 million for the next three years....
-Company A's free cash flow is estimated to be $75 million for the next three years. -expect growth of 5 percent per year in free cash flow -Company A has 18 million shares outstanding, cash on hand of $50 million, liabilities of $155 million, and a weighted average cost of capital of 8 percent. If you want to become an owner (a shareholder), how much can you expect to pay per share? (Do not round intermediate calculations. Round your final...
Brady, Inc. is in the process of budgeting cash inflows for the next three months. Cash...
Brady, Inc. is in the process of budgeting cash inflows for the next three months. Cash sales are 10 percent of total sales each month. Historically, sales on account have been collected as follows: 70 percent in the month of sale, 25 percent in the month after the sale, and the remaining 5 percent two months after the sale. Sales for the next three months are projected as follows: April, $192,000; May, $210,000; and June, $220,000. Accounts receivable on March...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT