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Part B: Cash Budgets You have been asked to prepare a cash budget for June and July 2022 for Dragon Limited with the following information:+ 1. Opening cash as of 1st June 2022 is $4,000 in balance. 2. Total expected sales for June are $500,000 and $600,000 for July. The sales for May are $450,000+ 3. Sales are made up of 50% cash and 50% on credit. 4. The receipts for credit sales are: 80% in the same month of sales and the remainder 20% in the following month. 5. Other cash incomes received are: Rent per month $2,500, and interest received at end of July $500. 7. 6. Borrow an additional $47,000 from BNZ in June and use part of the funds to pay $22,000 dividends in July. Bought inventory on credit: $350,000 in June and $460,000 in July. 60% of the payment to supplier in made in the same month of purchase and the remainder 40% in the following month. The inventory purchased in May was $190,000. 8. Cash expenses: Salaries and wages $55,000 per month, rates $4,000 per month, operating expenses of $10,000 for June and $50,000 for July; interest on loan $1,000 for June and $1,400 for July. 9. Purchase of a new equipment in June for $20,000. It has a residual value of $5,000 at the end of 2 years. Depreciate using straight line basis. 10. Sold an old equipment for $5,000 in June. The balance sheet shows the cost of this equipment at $18,000 with an accumulated depreciation of $16,000. + Required: e Prepare the cash budget for June and July 2022 for Dragon Limited and show the closing cash position for these two periods. (

Part B: Cash Budgets You have been asked to prepare a cash budget for June and July 2022 for Dragon Limited with the following information:+ 1. Opening cash as of 1st June 2022 is $4,000 in balance. 2. Total expected sales for June are $500,000 and $600,000 for July. The sales for May are $450,000+ 3. Sales are made up of 50% cash and 50% on credit. 4. The receipts for credit sales are: 80% in the same month of sales and the remainder 20% in the following month. 5. Other cash incomes received are: Rent per month $2,500, and interest received at end of July $500. 7. 6. Borrow an additional $47,000 from BNZ in June and use part of the funds to pay $22,000 dividends in July. Bought inventory on credit: $350,000 in June and $460,000 in July. 60% of the payment to supplier in made in the same month of purchase and the remainder 40% in the following month. The inventory purchased in May was $190,000. 8. Cash expenses: Salaries and wages $55,000 per month, rates $4,000 per month, operating expenses of $10,000 for June and $50,000 for July; interest on loan $1,000 for June and $1,400 for July. 9. Purchase of a new equipment in June for $20,000. It has a residual value of $5,000 at the end of 2 years. Depreciate using straight line basis. 10. Sold an old equipment for $5,000 in June. The balance sheet shows the cost of this equipment at $18,000 with an accumulated depreciation of $16,000. + Required: e Prepare the cash budget for June and July 2022 for Dragon Limited and show the closing cash position for these two periods. (

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...
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Part B: Cash Budgets ( You have been asked to prepare a cash budget for June and July 2022 for Dragon Limited with the following information: 1. Opening cash as of 1st June 2022 is $4,000 in balance. 2. Total expected sales for June are $500,000 and $600,000 for July. The sales for May are $450,000+ 3. Sales are made up of 50% cash and 50% on credit. 4. The receipts for credit sales are: 80% in the same month of sales and the remainder 20% in the following month. 5. Other cash incomes received are: Rent per month $2,500, and interest received at end of July $500. 6. Borrow an additional $47,000 from BNZ in June and use part of the funds to pay $22,000 dividends in July. 7. Bought inventory on credit: $350,000 in June and $460,000 in July. 60% of the payment to supplier in made in the same month of purchase and the remainder 40% in the following month. The inventory purchased in May was $190,000. 8. Cash expenses: Salaries and wages $55,000 per month, rates $4,000 per month, operating expenses of $10,000 for June and $50,000 for July; interest on loan $1,000 for June and $1,400 for July. 9. Purchase of a new equipment in June for $20,000. It has a residual value of $5,000 at the end of 2 years. Depreciate using straight line basis. 10. Sold an old equipment for $5,000 in June. The balance sheet shows the cost of this equipment at $18,000 with an accumulated depreciation of $16,000. Required: 4 Prepare the cash budget for June and July 2022 for Dragon Limited and show the closing cash position for these two periods. 4
Transcribed Image Text:Part B: Cash Budgets ( You have been asked to prepare a cash budget for June and July 2022 for Dragon Limited with the following information: 1. Opening cash as of 1st June 2022 is $4,000 in balance. 2. Total expected sales for June are $500,000 and $600,000 for July. The sales for May are $450,000+ 3. Sales are made up of 50% cash and 50% on credit. 4. The receipts for credit sales are: 80% in the same month of sales and the remainder 20% in the following month. 5. Other cash incomes received are: Rent per month $2,500, and interest received at end of July $500. 6. Borrow an additional $47,000 from BNZ in June and use part of the funds to pay $22,000 dividends in July. 7. Bought inventory on credit: $350,000 in June and $460,000 in July. 60% of the payment to supplier in made in the same month of purchase and the remainder 40% in the following month. The inventory purchased in May was $190,000. 8. Cash expenses: Salaries and wages $55,000 per month, rates $4,000 per month, operating expenses of $10,000 for June and $50,000 for July; interest on loan $1,000 for June and $1,400 for July. 9. Purchase of a new equipment in June for $20,000. It has a residual value of $5,000 at the end of 2 years. Depreciate using straight line basis. 10. Sold an old equipment for $5,000 in June. The balance sheet shows the cost of this equipment at $18,000 with an accumulated depreciation of $16,000. Required: 4 Prepare the cash budget for June and July 2022 for Dragon Limited and show the closing cash position for these two periods. 4
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