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Cash Budget Problem: Francesca’s Fragrances, Inc. Prepare Cash Budget for April, May, June 2019 Follow the...

Cash Budget Problem: Francesca’s Fragrances, Inc.

Prepare Cash Budget for April, May, June 2019

Follow the following to prepare the budget:

1. Real Sales 2019: January - $200,000

February - $400,000

March - $350,000

Projected for 2019: April - $500,000

May - $400,000

June - $450,000

Sales Payment History: 10% cash

30% Accts. Rec. – collected n/30 days

60% Accts. Rec. – collected n/60 days

Bad Debt Expense – negligible

Other Receipts:

Dividend due the firm - $30,000 in June.

Sale of Common Stock: $200,000 in June

2. Purchases: 75% of Sales – same month of expected sale.

10% Paid Cash

40% Paid 30 Days

50% Paid 60 Days

Rent: $8,000/month

Wages: 15% Sales + $9,000 Fixed Cost

Interest Payment: May = $120,000

Taxes: $40,000 in June

Sinking Fund: $15,000 due June

Dividend Payments: April: $60,000

Capital Investments: $10,000 in June

Repurchase or Retirement of Stock – None Anticipated

3. Cash Balances: @ 3/31 = $50,000; must maintain $35,000 Cash Balance Minimum

Expert Solution

since the rate of intrest is not given it is assumed that there is no intrest on borrowings

jeff jeffy answered 1 year ago

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