Question
Application/theory (excel problem) Problem - Cash Budget The following information pertains to Amigo Corporation: Month Sales...
| Application/theory (excel problem) | |||||||||
| Problem - Cash Budget | |||||||||
| The following information pertains to Amigo Corporation: | |||||||||
| Month | Sales | Purchases | |||||||
| July | $60,000 | $20,000 | |||||||
| August | 68,000 | 24,000 | |||||||
| September | 76,000 | 28,000 | |||||||
| October | 84,000 | 32,000 | |||||||
| November | 96,000 | 36,000 | |||||||
| December | 120,000 | 40,000 | |||||||
| • | Cash is collected from customers in the following manner: | ||||||||
| Month of sale | 40% | ||||||||
| Month following sale | 50% | ||||||||
| Two months following sale | 10% | ||||||||
| • | 50% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. | ||||||||
| Required: | |||||||||
| a. | Prepare a summary of cash collections and disbursements for the 4th quarter. | ||||||||
| b. | Prepare a cash budget, when the company requires the balance in Cash account | ||||||||
| minimum $25,000 . |
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