The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following:
April | May | ||
Cash sales | $10,000 | $18,000 | |
Credit sales | 28,900 | 35,000 | |
Total sales | $38,900 | $53,000 |
The owner also tells you that he expects cash sales of $18,600 and credit sales of $54,000 for June. No minimum cash balance is required. The owner of the company doesn’t have access to short-term loans.
Required:
1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. Round calculations and final answers to the nearest dollar. Be sure to enter percentages as whole numbers.
Cash Budget For June |
||||||
Beginning cash balance | $ | |||||
Collections: | ||||||
Cash sales | ||||||
Credit sales: | ||||||
Current month | ||||||
$ × % | ||||||
May credit sales | ||||||
$ × % | ||||||
April credit sales | ||||||
Total cash available | $ | |||||
Less disbursements: | ||||||
Inventory purchases: | ||||||
Current month | ||||||
$ × % | $ | |||||
Prior month | ||||||
$ × % | ||||||
Salaries and wages | ||||||
Rent | ||||||
Taxes | ||||||
Total cash needs | ||||||
Excess of cash available over needs | $ |
2. Conceptual Connection: Did the business show
a negative cash balance for June?
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