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 | 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 sale. Operating
expenses total $44,000 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 | $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 |
Wilson's Retail Company |
|||
---|---|---|---|
February |
March |
April |
|
Cash balance, beginning |
40,000.00 |
29,000.00 |
43,500.00 |
Total Cash receipts |
243,000.00 |
202,000.00 |
194,000.00 |
Cash available |
283,000.00 |
231,000.00 |
237,500.00 |
Total disbursements |
254,000.00 |
187,500.00 |
184,000.00 |
Cash balance, ending |
29,000.00 |
43,500.00 |
53,500.00 |
Total Cash receipts
February = ($3,00,000*0.40)+($2,05,000*0.60) = $2,43,000
March = ($2,05,000*0.40) + ($2,00,000*0.60) = $2,02,000
April = ($2,00,000*0.40) + ($1,90,000*0.60) = $1,94,000
Total disbursements
February = $300000*0.70 + 44000 = $2,54,000
March = $205000*0.70 + 44000 = $1,87,500
April = $200000*0.70 + 44000 = $1,84,000