Question

# Here are some important figures from the budget of Marston, Inc., for the second quarter of...

Here are some important figures from the budget of Marston, Inc., for the second quarter of 2016:

April May June
Credit sales \$ 415,000 \$ 364,000 \$ 452,000
Credit purchases 192,000 180,000 213,000
Cash disbursements
Wages, taxes, and expenses 81,000 76,500 105,200
Interest 10,700 10,700 10,700
Equipment purchases 39,500 12,000 160,000

The company predicts that 5 percent of its credit sales will never be collected, 30 percent of its sales will be collected in the month of the sale, and the remaining 65 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase. In March 2016, credit sales were \$342,000.

Using this information, complete the following cash budget: (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

April May June
Beginning cash balance \$ 122,000 \$ \$
Cash receipts
Cash collections from credit sales
Total cash available \$ \$ \$
Cash disbursements
Purchases \$ 184,000 \$ \$
Wages, taxes, and expenses
Interest
Equipment purchases
Total cash disbursements \$ \$ \$
Ending cash balance \$ \$ \$
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Hint #1

 Month April May June Beginning cash balance (closing of last month) (a) \$122,000 (given) \$153,600 \$241,350 Receipts Cash receipts (30% of current months' sales) \$415,000 x 30% = \$124,500 \$364,000 x 30% = \$109,200 \$452,000 x 30% = \$135,600 Cash collections from credit sales (65% of previous months' sales) \$342,000 x 65% = \$222,300 \$415,000 x 65% = \$269,750 \$364,000 x 65% = \$236,600 Total cash available (b) \$346,800 \$378,950 \$372,200 Payments Purchases (purchases of previous month) \$184,000 (given) \$192,000 \$180,000 Wages, taxes and insurance \$81,000 \$76,500 \$105,200 Interest \$10,700 \$10,700 \$10,700 Equipment purchases \$39,500 \$12,000 \$160,000 Total cash disbursements (c) \$315,200 \$291,200 \$455,900 Ending cash balance (a + b - c) \$153,600 \$241,350 \$157,650

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