Khloe Company imports gift items from overseas and sells them to gift shops and department stores throughout the United States. Khloe Company provided the following information:
Required:
Prepare a cash budget for Khloe Company for the month of November.
Khloe Company | |
Cash Budget | |
For the Month of November | |
Beginning balance, cash account | $ |
Received on account from sales in: | |
October | |
November | |
Total cash available | $ |
Disbursements: | |
Payments for purchases made in: | |
October | |
November | |
Salaries paid for work in: | |
October | |
November | |
Rent | |
Utilities | |
Employment taxes | |
Customs duty and shipping | |
Other cash expenses | |
Total disbursements | $ |
Ending cash balance | $ |
SOLUTION
Cash budget-
Particulars | Amount ($) |
Beginning balance, cash account | 53,965 |
Received on account from sales in: | |
October (1,290,000*27%) | 348,300 |
November (2,155,000*70%) | 1,508,500 |
Total cash available (A) | 1,910,765 |
Disbursements: | |
Payments for purchases made in: | |
October (950,000*85%) | 807,500 |
November (2,000,000*15%) | 300,000 |
Salaries paid for work in: | |
October (46,000*10%) | 4,600 |
November (46,000*90%) | 41,400 |
Rent | 11,600 |
Utilities | 5,700 |
Employment taxes | 6,900 |
Customs duty and shipping (2,000,000*30%) | 600,000 |
Other cash expenses | 40,000 |
Total disbursements (B) | 1,817,700 |
Ending cash balance (A-B) | 93,065 |
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