Following information relates to Acco Co.
- Beginning cash balance on July 1: $45,000.
- Cash receipts from sales: 24% is collected in the month of
sale, 50% in the next month, and 26% in the second month after sale
(uncollectible accounts are negligible and can be ignored). Sales
amounts are: May (actual), $1,548,000; June (actual), $1,080,000;
and July (budgeted), $1,260,000.
- Payments on merchandise purchases: 48% in the month of purchase
and 52% in the month following purchase. Purchases amounts are:
June (actual), $387,000; and July (budgeted), $600,000.
- Budgeted cash payments for salaries in July: $189,900.
- Budgeted depreciation expense for July: $10,800.
- Other cash expenses budgeted for July: $135,000.
- Accrued income taxes due in July: $80,000.
- Bank loan interest paid in July: $5,940.
Additional Information:
- Cost of goods sold is 35% of sales.
- Inventory at the end of June is $72,000 and at the end of July
is $231,000.
- Salaries payable on June 30 are $45,000 and are expected to be
$36,000 on July 31.
- The equipment account balance is $1,440,000 on July 31. On June
30, the accumulated depreciation on equipment is $252,000.
- The $5,940 cash payment of interest represents the 1% monthly
expense on a bank loan of $594,000.
- Income taxes payable on July 31 are $194,544, and the income
tax rate is 40%.
- The only other balance sheet accounts are Common Stock, with a
balance of $643,240 on June 30; and Retained Earnings, with a
balance of $964,800 on June 30.