Exercise 5-3
Riverside, Inc. forecasts the following sales for the second quarter of 2015, as well as actual March sales:
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March (actual)
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April
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May
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June
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2nd Q. Total
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$35,000
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$40,000
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$55,000
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$60,000
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$155,000
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In addition:
The company makes 60% cash sales and 40% credit sales.
It collects all credit sales in the month after the sale.
The firm budgets $48,000 for monthly operating expenses (including $4,000 for depreciation).
The firm pays one-half of its expenses in the month incurred, and the remaining 50% in the next month. (Riverside, Inc. had $26,000 of accounts payable at the end of March).
Required:
Present the monthly and quarterly cash receipts budget for Riverside, Inc. in the template below.
Present the monthly and quarterly cash payments budget for Riverside, Inc. in the template below.
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April
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May
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June
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2nd Q
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Cash sales
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Credit sales collected
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Cash receipts
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Current month's payments
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Payments from last month's purchases
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Cash payments
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Cash inflow (outflow)
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