CASH BUDGET; REQUIRED: Prepare a schedule showing cash collections during October. Prepare cash disbursements (payments) during October. Assuming that company had $150,000 cash balance as of October 1, calculate cash balance as of October 31. Company’s accounts receivable collection experience is as follows: Cash collected from current month’s sales; terms 1/10 n/30: 20% Cash collected from prior month’s sales (no discount) 65% Cash collected from sales two months ago: 13% Uncollectible receivables 2% Company’s estimated credit sales (company has no cash sales): July $480,000 August 420,000 September 370,000 October 350,000 November 400,000 Company’s monthly variable costs, paid as incurred, equal 60% of monthly sales. Monthly fixed expenses are: $80,000 (Rent Expense : $20,000; Salaries Expense: $30,000; Depreciation Exp.: $18,000; Advertising Expense: $8,000; Depletion Expense: $4,000) October cash collections: $_____________________ October cash disbursements: $__________________ October 31 cash balance: $_____________________
- Prepare a schedule showing cash collections during October.
- Prepare cash disbursements (payments) during October.
- Assuming that company had $150,000 cash balance as of October 1, calculate cash balance as of October 31.
Company’s accounts receivable collection experience is as follows:
Cash collected from current month’s sales; terms 1/10 n/30: 20%
Cash collected from prior month’s sales (no discount) 65%
Cash collected from sales two months ago: 13%
Uncollectible receivables 2%
Company’s estimated credit sales (company has no cash sales):
July $480,000
August 420,000
September 370,000
October 350,000
November 400,000
Company’s monthly variable costs, paid as incurred, equal 60% of monthly sales. Monthly fixed expenses are: $80,000 (Rent Expense : $20,000; Salaries Expense: $30,000;
October cash collections: $_____________________
October cash disbursements: $__________________
October 31 cash balance: $_____________________
Cash collection and cash disbursements includes the transactions that are made in cash only . It will not include depreciation expense or depletion expenses.
1.
Schedule showing cash collections
during October
|
Particulars |
Amt ($) |
|
Account receivable from current month’s sales (20 % of 350,000) |
70,000 |
|
Account receivable from September month’s sales (65% of 370,000) |
240,500 |
|
Account receivable from August month’s sales (13% of 420,000) |
54,600 |
|
Total Account receivable |
365,100 |
|
Less: Uncollectible receivables (2% of 365,100) |
7,302 |
|
Net cash collections in October |
357,798 |
Schedule showing cash disbursements
during October
|
Particulars |
Amount ($) |
|
Variable costs (60% of 350,000) |
210,000 |
|
Fixed expenses |
|
|
Rent |
20,000 |
|
Salaries |
30,000 |
|
Advertising |
8,000 |
|
Total cash disbursements |
268,000 |
3.
Cash balance
as on October 31
|
Particulars |
Amount ($) |
|
Cash balance as on October 1 |
150,000 |
|
Net cash collections during October |
357,798 |
|
Total cash |
507,798 |
|
Cash disbursement during October |
268,000 |
|
Net cash balance on October 31 |
239,798 |
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