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Castor Incorporated is preparing its master budget. Budgeted sales and cash payments for merchandise purchases for the next three months follow. Budgeted Sales Cash payments for merchandise purchases Cash receipts from Total cash receipts $ 26,400 22,220 18,480 18,920 Sales are 50% cash and 50% on credit. Sales in March were $26,400. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $13,200 in cash and $2,200 in loans payable. A minimum cash balance of $13,200 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $13,200. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If a preliminary cash balance above $13,200 at month-end exists, loans are repaid from the excess. Expenses are paid in the month incurred and include sales commissions (10% of sales), shipping (2% of sales), office salaries ($5,500 per month), and rent ($3,300 per month). (a) Prepare a schedule of cash receipts from sales for April, May, and June. (b) Prepare a cash budget for each of April, May, and June. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) CASTOR INCORPORATED Schedule of Cash Receipts from Sales April May $ 35,200 $ 44,000 Beginning cash balance 0 $ CASTOR, INCORPORATED Cash Budget April Total cash available Less: Cash payments for: April Total cash payments Preliminary cash balance Ending cash balance $ 35,200 Loan balance - Beginning of month $ Additional loan (loan repayment) Loan balance - End of month Loan balance April $ 2,200 $ 44,000 0 May May May June 0 $ 0 June $26,400 June June 0 0

Castor Incorporated is preparing its master budget. Budgeted sales and cash payments for merchandise purchases for the next three months follow. Budgeted Sales Cash payments for merchandise purchases Cash receipts from Total cash receipts $ 26,400 22,220 18,480 18,920 Sales are 50% cash and 50% on credit. Sales in March were $26,400. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $13,200 in cash and $2,200 in loans payable. A minimum cash balance of $13,200 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $13,200. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If a preliminary cash balance above $13,200 at month-end exists, loans are repaid from the excess. Expenses are paid in the month incurred and include sales commissions (10% of sales), shipping (2% of sales), office salaries ($5,500 per month), and rent ($3,300 per month). (a) Prepare a schedule of cash receipts from sales for April, May, and June. (b) Prepare a cash budget for each of April, May, and June. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) CASTOR INCORPORATED Schedule of Cash Receipts from Sales April May $ 35,200 $ 44,000 Beginning cash balance 0 $ CASTOR, INCORPORATED Cash Budget April Total cash available Less: Cash payments for: April Total cash payments Preliminary cash balance Ending cash balance $ 35,200 Loan balance - Beginning of month $ Additional loan (loan repayment) Loan balance - End of month Loan balance April $ 2,200 $ 44,000 0 May May May June 0 $ 0 June $26,400 June June 0 0

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 72P: Cash Budget The controller of Feinberg Company is gathering data to prepare the cash budget for...
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Castor Incorporated is preparing its master budget. Budgeted sales and cash payments for merchandise purchases for the next three months follow. April $ $ 35,200 26,400 22,220 18,480 18,920 Sales are 50% cash and 50% on credit. Sales in March were $26,400. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $13,200 in cash and $2,200 in loans payable. A minimum cash balance of $13,200 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $13,200. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If a preliminary cash balance above $13,200 at month-end exists, loans are repaid from the excess. Expenses are paid in the month incurred and include sales commissions (10% of sales), shipping (2% of sales), office salaries ($5,500 per month), and rent ($3,300 per month). Budgeted Sales Cash payments for merchandise purchases Cash receipts from (a) Prepare a schedule of cash receipts from sales for April, May, and June. (b) Prepare a cash budget for each of April, May, and June. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) CASTOR INCORPORATED Schedule of Cash Receipts from Sales April May $ 35,200 $ 44,000 Total cash receipts 0 $ CASTOR, INCORPORATED Cash Budget April Beginning cash balance Total cash available Less: Cash payments for: Total cash payments Preliminary cash balance Ending cash balance Loan balance - Beginning of month $ Loan balance April $ 2,200 Additional loan (loan repayment) Loan balance - End of month 0 $ 44,000 May May May June 0 $ 0 June $26,400 June June 0 0
Transcribed Image Text:Castor Incorporated is preparing its master budget. Budgeted sales and cash payments for merchandise purchases for the next three months follow. April $ $ 35,200 26,400 22,220 18,480 18,920 Sales are 50% cash and 50% on credit. Sales in March were $26,400. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $13,200 in cash and $2,200 in loans payable. A minimum cash balance of $13,200 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $13,200. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If a preliminary cash balance above $13,200 at month-end exists, loans are repaid from the excess. Expenses are paid in the month incurred and include sales commissions (10% of sales), shipping (2% of sales), office salaries ($5,500 per month), and rent ($3,300 per month). Budgeted Sales Cash payments for merchandise purchases Cash receipts from (a) Prepare a schedule of cash receipts from sales for April, May, and June. (b) Prepare a cash budget for each of April, May, and June. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) CASTOR INCORPORATED Schedule of Cash Receipts from Sales April May $ 35,200 $ 44,000 Total cash receipts 0 $ CASTOR, INCORPORATED Cash Budget April Beginning cash balance Total cash available Less: Cash payments for: Total cash payments Preliminary cash balance Ending cash balance Loan balance - Beginning of month $ Loan balance April $ 2,200 Additional loan (loan repayment) Loan balance - End of month 0 $ 44,000 May May May June 0 $ 0 June $26,400 June June 0 0
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