Question

The cash? balance, May? 31, 20X4, is $ 12, 000. Sales proceeds are collected as? follows: 80 % the month of? sale, 10 % the second? month, and 10 % the third month. Accounts receivable are $ 55,000 on May? 31, 20X4, consisting of $ 23,000 from April sales and $ 32,000 from May sales. Accounts payable on May? 31, 20X4, are $ 151,000. Carmen Company pays 20 % of purchases during the month of purchase and the remainder during the following month. All operating expenses requiring cash are paid during the month of? recognition, except that insurance and property taxes are paid annually in December for the forthcoming year. Requirement 1. Prepare a cash budget for June. Confine your analysis to the given data. Ignore income taxes. Requirement 1. Prepare a cash budget for June. ?(Round your answers to the nearest whole? number.)

Carmen Company

Cash Budget

For the Month Ended June 20, 20X4

(In thousands)

Beginning Cash, May 31, 20X4

Cash Reciepts:

Collections from customers from:

June sales

252

May sales

April sales

Total cash available during June

Data Table

Sales			$315
Inventory, May 31	$60
Purchases	195
Available for sale	255
Inventory, June 30	52
Cost of goods sold			203
Gross margin			$112
Operating expenses:
Wages	$45
Utilities	7
Advertising	16
Depreciation	3
Office expenses	2
Insurance and property taxes	5		78
Operating income			$34

Answer 1

Solution:

Carmen Company
Cash Budget
For the month ended June 30, 20X4
Particulars	Amount (In Thousand)
Beginning cash - May 31, 20X4	$12.00
Cash Receipts:
Collection from customer from:
June Sales ($315*80%)	$252.00
May Sales ($32/20%*10%)	$16.00
April Sales	$23.00
Total cash available during June	$303.00
Less: Cash disbursement:
Cash paid for merchandise purchase from:
June Purchases ($195*20%)	$39.00
May Purchases	$151.00
Cash paid for wages	$45.00
Cash paid for utilities	$7.00
Cash paid for advertising	$16.00
Cash paid for office expenses	$2.00
Total cash disbursement	$260.00
Ending cash balance	$43.00