Cash Budget
Janet Wooster owns a retail store that sells new and used sporting equipment. Janet has requested a cash budget for October. After examining the records of the company, you find the following:
August | September | |||
Cash sales | $6,000 | $4,500 | ||
Credit sales | 58,000 | 62,000 | ||
Total sales | $64,000 | $66,500 |
Janet tells you that she expects cash sales of $5,000 and credit sales of $63,000 for October. She likes to have $3,000 on hand at the end of the month and is concerned about the potential October ending balance.
Required:
Prepare a cash budget for October. Include supporting schedules for cash collections and cash payments. Round your intermediate computations and final answers to the nearest dollar.
Wooster Sporting Goods Store | ||
Cash Budget | ||
For the Month of October | ||
Beginning cash balance | $ | |
Collections: | ||
Cash sales | ||
Credit sales: | ||
October | ||
September | ||
August | ||
Total cash available | $ | |
Disbursements: | ||
Inventory purchases: | ||
October | $ | |
September | ||
Salaries and wages | ||
Rent | ||
Taxes | ||
Other operating expenses | ||
Owner withdrawal | ||
Advertising | ||
Internet and telephone | ||
Ending cash balance | $ |
Answer:
Wooster Sporting Goods Store | |
Cash Budget | |
For the Month of October | |
Particulars | Amount ($) |
Beginning cash balance | 1,110 |
Collections: | |
Cash sales | 5,000 |
Credit sales: | |
October (64000*40%) | 25,600 |
September (62000*36%) | 22,320 |
August (58000*22%) | 12,760 |
Total cash available (A) | 66,790 |
Disbursements: | |
Inventory purchases: | |
October (68000*70%*45%) | 21,420 |
September (66500*70%*55%) | 25,603 |
Salaries and wages | 3,850 |
Rent | 3,150 |
Taxes | 1,635 |
Other operating expenses | 3,800 |
Owner withdrawal | 3,500 |
Advertising | 1,500 |
Internet and telephone | 340 |
Total Paid (B) | 64,798 |
Ending cash balance | 1,992 |
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