Question

1. Prepare a monthly cash budget for the first quarter of the fiscal year beginning July...

1. Prepare a monthly cash budget for the first quarter of the fiscal year beginning July 1, assuming the following facts:
a. Cash collections typically average 50% of charges. Cash is received, on average, 40% in the month of service, 30% in the next month, 15% in the second month after service, 5% each in the next two months and 5% is uncollectible.
b.​Charges for February, March, April, May, and June were $300.000, $400,000, $400,000, $200,000 and $500,000, respectively. Charges for July, August and September are expected to be $400,000, $200,000 and $300,000.
c.​The cash balance at June 30 is expected to be $100,000. Monthly interest is expected to be .1% on the end of month cash balance.
d.​Cash outflows are anticipated to be 90% of average receipts for the quarter.
Business   Accounting   
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Answer #1
Month Charges July August September
Cash collection 200000 100000 150000
February 150000
March 200000 10000
April 200000 10000 10000
May 100000 15000 5000 5000
June 250000 75000 37500 12500
July 200000 80000 60000 30000
August 100000 40000 30000
September 150000 60000
Total receipt for the quarter 390000 252500 287500
Beginning Balance 100000 140000 166650
Monthly Interest 1000 1400 1666.5
Total Cash available 491000 393900 455816.5
Cash disbursement(outflow) 351000 227250 258750
Ending Balance 140000 166650 197066.5
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