Khloe Company imports gift items from overseas and sells them to gift shops and department stores throughout the United States. Khloe Company provided the following information: The October 31 balance in the cash account is $53,815. All sales are on account. Sales in September were $990,000 and in October were $1,290,000. November sales are expected to be $2,150,000. In Khloe’s experience, 70 percent of sales are collected in the month of sale and 27 percent are collected in the month following sale. The remaining credit sales are uncollectible. Khloe purchases all merchandise on account. Purchases in September were $735,000 and in October were $950,000. November purchases are expected to be $2,020,000 as Khloe prepares for the Christmas buying season. Fifteen percent of purchases are paid in the month of purchase, while the remainder is paid in the month following the purchase month. Khloe Company has nine employees who are paid a total of $45,000 per month. Due to timing issues, about 90 percent of total wages are paid in the month earned and the remaining 10 percent are paid in the following month. Rent for office and warehouse space is $11,700 paid monthly in cash. Utilities average $5,600 per month and are paid in cash. In November, Khloe expects to pay employment taxes of $6,850. Since Khloe imports product from overseas, customs duty and shipping to the central location of 10 percent of current monthly purchase cost must be paid in the month of purchase. Other cash expenses for November are expected to be $42,000. Required: Prepare a cash budget for Khloe Company for the month of November. Khloe CompanyCash BudgetFor the Month of November Beginning balance, cash account $fill in the blank 1 Received on account from sales in: October fill in the blank 2 November fill in the blank 3 Total cash available $fill in the blank 4 Disbursements: Payments for purchases made in: October fill in the blank 5 November fill in the blank 6 Salaries paid for work in: October fill in the blank 7 November fill in the blank 8 Rent fill in the blank 9 Utilities fill in the blank 10 Employment taxes fill in the blank 11 Customs duty and shipping fill in the blank 12 Other cash expenses fill in the blank 13 Total disbursements $fill in the blank 14 Ending cash balance $fill in the blank 15

Khloe Company imports gift items from overseas and sells them to gift shops and department stores throughout the United States. Khloe Company provided the following information: The October 31 balance in the cash account is $53,815. All sales are on account. Sales in September were $990,000 and in October were $1,290,000. November sales are expected to be $2,150,000. In Khloe’s experience, 70 percent of sales are collected in the month of sale and 27 percent are collected in the month following sale. The remaining credit sales are uncollectible. Khloe purchases all merchandise on account. Purchases in September were $735,000 and in October were $950,000. November purchases are expected to be $2,020,000 as Khloe prepares for the Christmas buying season. Fifteen percent of purchases are paid in the month of purchase, while the remainder is paid in the month following the purchase month. Khloe Company has nine employees who are paid a total of $45,000 per month. Due to timing issues, about 90 percent of total wages are paid in the month earned and the remaining 10 percent are paid in the following month. Rent for office and warehouse space is $11,700 paid monthly in cash. Utilities average $5,600 per month and are paid in cash. In November, Khloe expects to pay employment taxes of $6,850. Since Khloe imports product from overseas, customs duty and shipping to the central location of 10 percent of current monthly purchase cost must be paid in the month of purchase. Other cash expenses for November are expected to be $42,000. Required: Prepare a cash budget for Khloe Company for the month of November. Khloe CompanyCash BudgetFor the Month of November Beginning balance, cash account $fill in the blank 1 Received on account from sales in: October fill in the blank 2 November fill in the blank 3 Total cash available $fill in the blank 4 Disbursements: Payments for purchases made in: October fill in the blank 5 November fill in the blank 6 Salaries paid for work in: October fill in the blank 7 November fill in the blank 8 Rent fill in the blank 9 Utilities fill in the blank 10 Employment taxes fill in the blank 11 Customs duty and shipping fill in the blank 12 Other cash expenses fill in the blank 13 Total disbursements $fill in the blank 14 Ending cash balance $fill in the blank 15

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter21: Cash Budgeting (cashbud)

Section: Chapter Questions

Problem 1R: On January 1, Sweet Pleasures, Inc., begins business. The company has 14,000 cash on hand and is...

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Question

Khloe Company imports gift items from overseas and sells them to gift shops and department stores throughout the United States. Khloe Company provided the following information:

The October 31 balance in the cash account is $53,815.
All sales are on account. Sales in September were $990,000 and in October were $1,290,000.
November sales are expected to be $2,150,000.
In Khloe’s experience, 70 percent of sales are collected in the month of sale and 27 percent are collected in the month following sale. The remaining credit sales are uncollectible.
Khloe purchases all merchandise on account. Purchases in September were $735,000 and in October were $950,000. November purchases are expected to be $2,020,000 as Khloe prepares for the Christmas buying season. Fifteen percent of purchases are paid in the month of purchase, while the remainder is paid in the month following the purchase month.
Khloe Company has nine employees who are paid a total of $45,000 per month. Due to timing issues, about 90 percent of total wages are paid in the month earned and the remaining 10 percent are paid in the following month.
Rent for office and warehouse space is $11,700 paid monthly in cash.
Utilities average $5,600 per month and are paid in cash.
In November, Khloe expects to pay employment taxes of $6,850.
Since Khloe imports product from overseas, customs duty and shipping to the central location of 10 percent of current monthly purchase cost must be paid in the month of purchase.
Other cash expenses for November are expected to be $42,000.

Required:

Prepare a cash budget for Khloe Company for the month of November.

Khloe CompanyCash BudgetFor the Month of November

Beginning balance, cash account	$fill in the blank 1
Received on account from sales in:
October	fill in the blank 2
November	fill in the blank 3
Total cash available	$fill in the blank 4
Disbursements:
Payments for purchases made in:
October	fill in the blank 5
November	fill in the blank 6
Salaries paid for work in:
October	fill in the blank 7
November	fill in the blank 8
Rent	fill in the blank 9
Utilities	fill in the blank 10
Employment taxes	fill in the blank 11
Customs duty and shipping	fill in the blank 12
Other cash expenses	fill in the blank 13
Total disbursements	$fill in the blank 14
Ending cash balance	$fill in the blank 15

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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