The following information is available to sssist you in preporing a company's cash budget.a. The cash balance on July 1 is $41,000.b. Actual sales for May and June and expected sales for July are as follows:JuneJulyCash salesSales on accountMay$ 68,480 $ 87,480 $ 95,8e0$ 415,eee $ 614,0ee $ 692,0eeSales on account are collected over a three-month period os follows: 20% collected in the month of ssle, 60% collected in the monthfollowing sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible.c. Purchases of inventory will total $376,000 for July. Thirty percent of a month's inventory purchases are paid during the month ofpurchase. The accounts payable remaining from June's inventory purchoses total $174,500, all of which will be paid in July.d. Selling and administrative expenses are budgeted at $452,000 for July. Of this amount, $63,500 is for deprecistion.e. A new web server for the Marketing Depertment costing $86,500 will be purchased for cash during July, and dividends toteling$10,500 will be paid during the month.£. The company maintsins a minimum cash balance of $20,000. An open line of credit is available from the company's bank toincrease its cash balance os needed.Required:1. Calculate the expected cosh collections for July.2. Calculate the expected cash disbursements for merchandise purchases for July.3. Prepore a cash budget for July. Indicate in the financing section any borrowing that will be needed during the month. Assume thatany interest will not be paid until the following month.Complete this question by entering your answers in the tabs below.Req 1 and 2Req 3Prepare a cash budget for July. Indicate in the financing section any borrowing that will be needed during the month. Assumethat any interest will not be paid until the following month.Cash BudgetFor the Month of JulyBeginning cash balanceAdd callections from customersTotal cash availableLess cash disbursements:Payments to suppliers for inventarySeling and administrative expensesNew web serverDividends paidTotal cash disbursementsExcess (deficiency) of cash available aver disbursementsFinancing:BarrawingsRepaymentsInterestTotal financingEnding cash balance< Req 1 and 2Req 3> The following information is available to assist you in preparing a company's cash budget.a. The cash balance on July 1 is $41,000.b. Actual sales for May and June and expected sales for July are as follows:May$ 68,400 $ 87,400 $ 95,800$ 415,000 $ 614,000 $ 692,000JuneJulyCash salesSales on accountSales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the monthfollowing sale, and 18% collected In the second month following sale. The remaining 2% is uncollectible.C. Purchases of inventory will total $376,000 for July. Thirty percent of a month's Inventory purchases are paid during the month ofpurchase. The accounts payable remaining from June's inventory purchases total $174,500, all of which will be paid in July.d. Selling and administrative expenses are budgeted at $452,000 for July. Of this amount, $63,500 is for depreciation.e. A new web server for the Marketing Department costing $86,500 will be purchased for cash during July, and dividends totaling$10,500 will be paid during the month.f. The company maintalns a minimum cash balance of $20,000. An open line of credit is avallable from the company's bank toIncrease its cash balance as needed.Requlred:1. Calculate the expected cash collections for July.2. Calculate the expected cash disbursements for merchandise purchases for July.3. Prepare a cash budget for July. Indicate in the financing section any borrowing that will be needed during the month. Assume thatany interest will not be paid untii the following month.Complete this question by entering your answers in the tabs below.Req 1 and 2Req 31. Calculate the expected cash collections for July.2. Calculate the expected cash disbursements for merchandise purchases for July.Total cash collectionsCash disbursements for merchandise purchases< Req 1 and 2Req 3 >

Working Notes: 1. Collection of credit sales from May = ($415,000*18%) = $74,700 from June…

The following information is available to assist you In preparing a company's cash budget. a. The cash balance on July 1 is $41,000. b. Actual sales for May and June and expected sales for July are as follows: July May $ 68,400 $ 87,400 $ 95,800 $ 415,000 $ 614,000 $ 692,000 June Cash sales Sales on account Sales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible. C. Purchases of inventory will total $376,000 for July. Thirty percent of a month's Inventory purchases are paid during the month purchase. The accounts payable remaining from June's inventory purchases total $174,500, all of which will be paid in July. d. Selling and administrative expenses are budgeted at $452,000 for July. Of this amount, $63,500 Is for depreciation. e. A new web server for the Marketing Department costing $86,500 will be purchased for cash during July, and dividends totaling $10,500 will be paid during the month. f. The company malntalns a minimum cash balance of $20,000. An open line of credit is avallable from the company's bank to Increase its cash balance as needed. Requlred: 1. Calculate the expected cash collections for July. 2. Calculate the expected cash disbursements for merchandise purchases for July. 3. Prepare a cash budget for July. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be pald until the following month.

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 4P