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Exercise 9-45 Cash Budget The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following: Cash balance on June 1 is R7,360. a. b. Actual sales for April and May are as follows: April May Cash sales R100,000 R180,000 Credit sales 350,000 R530,000 Total sales R389,000 Credit sales are collected over a three-month period: c. 40% in the month of sale, 30% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. d. Inventory purchases average 64% of a month's total sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month. Salaries and wages total R117,500 per month, including a R45,000 salary paid to the owner. Rent is R41,000 per month. Taxes to be paid in June are R67,800. The owner also tells you that he expects cash sales of R186,000 and credit sales of R540,000 for June. No minimum cash balance is required. The owner of the company doesn't have access to short-term loans. e. Required: 1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments.

Exercise 9-45 Cash Budget The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following: Cash balance on June 1 is R7,360. a. b. Actual sales for April and May are as follows: April May Cash sales R100,000 R180,000 Credit sales 350,000 R530,000 Total sales R389,000 Credit sales are collected over a three-month period: c. 40% in the month of sale, 30% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. d. Inventory purchases average 64% of a month's total sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month. Salaries and wages total R117,500 per month, including a R45,000 salary paid to the owner. Rent is R41,000 per month. Taxes to be paid in June are R67,800. The owner also tells you that he expects cash sales of R186,000 and credit sales of R540,000 for June. No minimum cash balance is required. The owner of the company doesn't have access to short-term loans. e. Required: 1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments.

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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b. a. Prepare a schedule of cash payments for Fein Company for the month of August. OBJECTIVE 3 C. Exercise 9-45 Cash Budget The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following: Cash balance on June 1 is R7,360. b. Actual sales for April and May are as follows: d. F. a. April May Cash sales R180,000 Credit sales to 00 R530,000 Total sales R389,000 c. Credit sales are collected over a three-month period: R 40% in the month of sale, 30% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. d. Inventory purchases average 64% of a month's total B sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month. Salaries and wages total R117,500 per month, including a R45,000 salary paid to the owner. Rent is R41,000 per month. g. Taxes to be paid in June are R67,800. The owner also tells you that he expects cash sales of R186,000 and credit sales of R540,000 for June. No minimum cash balance is required. The owner of the company doesn't have access to short-term loans. e. Required: 1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments.
Transcribed Image Text:b. a. Prepare a schedule of cash payments for Fein Company for the month of August. OBJECTIVE 3 C. Exercise 9-45 Cash Budget The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following: Cash balance on June 1 is R7,360. b. Actual sales for April and May are as follows: d. F. a. April May Cash sales R180,000 Credit sales to 00 R530,000 Total sales R389,000 c. Credit sales are collected over a three-month period: R 40% in the month of sale, 30% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. d. Inventory purchases average 64% of a month's total B sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month. Salaries and wages total R117,500 per month, including a R45,000 salary paid to the owner. Rent is R41,000 per month. g. Taxes to be paid in June are R67,800. The owner also tells you that he expects cash sales of R186,000 and credit sales of R540,000 for June. No minimum cash balance is required. The owner of the company doesn't have access to short-term loans. e. Required: 1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments.
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