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Ch9 Cash Budget Review

Ch9 Cash Budget Review - Wages total $20,000 each month and...

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Chapter 9 Review Exercise – Cash Budget The controller for a local company that manufactures swim shoes is gathering information to prepare a cash budget. He will develop it based on the following information. Sales projections are as follows: May $60,000: June $75,000: July $80,000: August $70,000 and September $50,000. Of all sales, 30% are cash sales. Of credit sales, 60% are collected within the month of sale, 20% are collected in the following month, and 15% are collected in the second month following the sale. Raw material purchases equal 20% of total sales. Of the raw materials purchases, 50% is paid in the month of purchase and the remaining 50% in paid in the following month.
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Unformatted text preview: Wages total $20,000 each month and are paid on the last day of the month. Overhead is budgeted at $15,000 per month which includes $2,000 of depreciation. A new machine was purchased in July costing $4,000. A dividend of $1,100 was declared on June 30 and paid on July 15. The cash balance on July 1 is $27,000. Answer the following questions related to the cash budgeting process. Uncollectible sales for May = Cash sales for July = Cash receipts from accounts receivable in July = Total cash available in July = July cash payments for direct material purchases = Total disbursements for July = Anticipated cash balance on July 31 =...
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