Question

PLEASE SHOW ALL WORK

Sales for October, November, and December are expected to be $200,000, $180,000, and $220,000, respectively, for the Gurumai Company. All sales are on account and are collected 50 percent in the month of sale and 50 percent in the following month. Materials are purchased one month before being needed, and all purchases and expenses are paid for as they occur. Activities for the quarter are expected to be:

October                      November                  December     

Materials used	$40,000	$36,000	$44,000
Salaries	70,000	68,000	72,000
Maintenance and repairs	18,000	18,000	18,000
Depreciation	36,000	36,000	36,000
Utilities and other	14,000	14,000	14,000
Dividends paid	-0-	10,000	-0-
Payment on bonds	8,000	8,000	8,000

Required: Using the given information, prepare a cash budget for November assuming that cash balance at the beginning of November is expected to be 10,000.

Answer 1