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Assignment: Operating Budgeting The following data pertains to XY Company Budgeted sales for January 201X                         

Assignment: Operating Budgeting

The following data pertains to XY Company

Budgeted sales for January 201X                                               $200,000

The estimated increase in sales for the coming months                                   2%

Beginning inventory                                                                             20%      of CGS

Cost of goods sold (variable)                                                               60%      of Sales

Other variable expenses                                                                        10%      of Sales

Depreciation per month                                                                    10,000

Other fixed costs                                                                               20,000

Assume the following data for last December

Cash                                                                                                      2,000

Accounts Receivable                                                                       100,000

Long-term-assets (net)                                                                1,000,000

Accounts payable                                                                              80,000

Long-term-debt                                                                               300,000

Other information:

Sales are collected as follows

In the month of sales                                                                              70%

In the following month                                                                           30%

Purchases are paid as follows

In the month of purchase                                                                        20%

In the following month                                                                           80%

All other expenses that require cash disbursements are paid as incurred. The minimum cash balance required at the end of each period is $2,000. Prepare: Purchase budget and cash budget for the first quarter.

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