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Cash Budget Problem: Mia Company Prepare Cash Budget for April, May, June 2018 Follow the following...

Cash Budget Problem: Mia Company

Prepare Cash Budget for April, May, June 2018

Follow the following to prepare the budget:

1.         Real Sales 2018:         January                        - $100,000

                                                February                      - $200,000

                                                March                          - $150,000

            Projected for 2018:     April                            - $400,000

                                                May                             - $300,000

                                                June                             - $200,000

            Sales Payment History:           10% cash

                                                            40% Accts. Rec. – collected n/30 days

                                                            50% Accts. Rec. – collected n/60 days

                                                            Bad Debt Expense – negligible

            Other Receipts: Dividend due the firm - $40,000 in June.

2.         Purchases:       60% of Sales – same month of expected sale.

                                    20% Paid Cash

                                    50% Paid 30 Days

                                    30% Paid 60 Days

            Interest Payment:   May = $140,000

            Rent:   $6,000/month

            Wages:   15% Sales + $7,000 Fixed Cost

            Taxes:   $20,000 in April

            Sinking Fund: $10,000 due June

Dividend Payments:   April = $30,000

Capital Investments:   $20,000 in June

            Repurchase or Retirement of Stock – None Anticipated

           

3.         Cash Balances:   @ 3/31 = $60,000; must maintain $45,000 Cash Balance Minimum

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Homework Answers

Answer #1
April May June
Opening Cash 60000 45,000 45,000
Sales Receipt ( January)
Sales Receipt ( February) 100000
Sales Receipt ( March ) 60000 75000
Sales Receipt ( April ) 40000 160000 200000
Sales Receipt ( May ) 30000 120000
Sales Receipt ( June ) 20000
Dividend Income 40000
Purchase Payment ( January)
Purchase Payment ( February) -36000
Purchase Payment ( March ) -45000 -27000
Purchase Payment ( April ) -48000 -120000 -72000
Purchase Payment ( May ) -36000 -90000
Purchase Payment ( June ) -24000
Interest Payment -140000
Rent -6000 -6000 -6000
Wages -67000 -52000 -37000
Taxes -20000
Sinking Fund -10000
Dividend Payments -30000
Capital Investments -20000
Cash Budgeting Required 37000 116000 -121000
Ending Cash 45000 45,000 45,000

Please contact in case you need any clarifications. Thanks.

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