Question

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 sale. Operating expenses total $40,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $30,000.

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 1

	Wilson's Retail Company
	Cash Budgets
	February, March, and April
		February	March	April
	Cash balance, beginning	30000	47000	53500
	Total Cash receipts	267000	218000	173000
	Cash available	297000	265000	226500
	Total disbursements	250000	211500	180000
	Cash balance, ending	47000	53500	46500
	Total Cash Receipts:	January	February	March	April
	Sales Revenue	300000	245000	200000	155000
	In the Month of Sales(60%)	180000	147000	120000	93000
	In the Next Month (40%)		120000	98000	80000
	Total Cash Receipts		267000	218000	173000
	Total Cash Disbusement:	January	February	March	April
	Sales Revenue	300000	245000	200000	155000
	Cost of Goods Sold(70%)	210000	171500	140000	108500
	Payment for Merchandise		210000	171500	140000
	Operating Expense		40000	40000	40000
	Total Cash Disbursement		250000	211500	180000