Problem:
Given below are some important figures from the budget of Big Blast, Inc., for the second quarter of 2000.
The company predicts that 5% of its credit sales will never be collected, 35% of its sales will be collected in the month of the sale, and the remaining 60% will be collected in the following month. Credit purchases will be paid in the month following the purchase.
In March 2000, credit sales were 275,000. Using this information, complete the attached cash budget.
| Important information: |
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April |
May |
June |
| Credit sales |
295000 |
340000 |
310000 |
| Credit purchases |
140000 |
150000 |
130000 |
| Cash disbursements: |
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| Wages, taxes & expenses |
25000 |
27500 |
32000 |
| Interest |
8000 |
8000 |
8000 |
| Equipment purchases |
50000 |
70000 |
254000 |
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| Complete this cash budget: |
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April |
May |
June |
| Beginning cash balance |
275000 |
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| Cash receipts |
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| Cash collections from credit sales |
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| Total Cash available |
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| Cash disbursements |
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| Purchases |
115000 |
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| Wages, taxes & expenses |
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| Interest |
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| Equipment purchases |
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| Total cash disbursements |
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| Ending cash balance |
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