Question

Boston Company developed the following budgeted data for the month of June: a. The June 1st...

Boston Company developed the following budgeted data for the month of June:

a. The June 1st cash balance is $34,700.

b. Cash sales in June are $75,000.

c. Credit sales for June are expected to be $40,000. Credit sales for May were $60,000 and for April were $50,000. 70% of credit sales are collected in the month of sale, 20% are collected in the month following the sale, and the remaining 10% are collected in the second month following the sale.

d. Purchases for May were $100,000 and for June are $80,000. 25% of purchases are paid in the month of purchase and the remaining 75% in the month following the purchase.

e. June salaries are $35,400, utilities are $14,200, and depreciation on the building and equipment is $20,000.

Required:

Prepare a cash budget for the month of June 2018.

Homework Answers

Answer #1
Cash collections in June month:
Cash sales for June 75000
Credit sales of April (50000*10%) 5000
Credit Sales of May (60000*20%) 12000
Credit Sales of June (40000*70%) 28000
Total cash collections in June 120000
Cash disbursement in June:
Purchase of june (80000*25%) 20000
Purchase of May (100000*75%) 75000
Cash disbursal to supplier. 95000
Cash budget
Beginning Balance of cash 34700
Add: Collections from customers 120000
Total cash available 154700
Less: Cash disbursals:
Disbursal to supplier 95000
Salaries 35400
Utilities 14200
Total cash disbursals 144600
Ending balance of cash 10100
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