Cash budget week#4 - All other variable expenses are 4 of...

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Prepare a cash budget for each of the three months: June through august, using the information below. Also show totals for the quarter. · Submit your solution to the Assignment Link. Information for the Cash Budget Recent and projected Sales Recent and projected Purchases April $300,000 May 350,000 May $434,000 June 700,000 June 248,000 July 400,000 July 248,000 August 400,000 August 186,000 September 300,000 Credit sales are 90% of total sales. Credit accounts are collected 80% in the month following the sale and 20% in the subsequent month. The average gross profit on sales is 38%. The policy is to acquire enough inventory each month to equal the following month’s projected cost of goods sold. All purchases are paid for in the month following purchase. The following expenses are paid each month: Salaries, wages, and commissions average 20% of sales.
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Unformatted text preview: All other variable expenses are 4% of sales. Property taxes, and miscellaneous payroll and other items are $55,000 monthly. Depreciation is $2,500 monthly. In June, $55,000 is going to be disbursed for fixtures acquired on account in May. The beginning cash balance is $29,000. A minimum cash balance of $25,000 is to be maintained. All borrowings and repayments of principal are made in multiples of $1,000. Borrowings occur at the beginning of the month. Repayments are made at the end of the month of repayment. Interest is compounded and added to the outstanding balance each month, but interest is paid only at the end of month when any principal is repaid. The interest rate is 10% per annum. Round interest computations to the nearest dollar....
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This note was uploaded on 01/05/2012 for the course 101 melissa jo taught by Professor Acc101 during the Spring '11 term at Aarhus Universitet.

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