apter 20 GH G Saved Help Save & Che Castor, Inc., is preparing its master budget

Question

apter 20 GH G Saved Help Save & Che Castor, Inc., is preparing its master budget for the quarter ended June 30. Budgeted sales and cash payments for merchandise for the next three months follow: June May $30,700 $41,300 $25,300 22, 800 15, 500 15,900 Budgeted Apri Sales 0.92 points Cash payments for merchandise eBook Hint Print Sales are 70% cash and 30% on credit. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $13.300 in cash, $13,300 in accounts receivable, $11,000 in accounts payable, and a $3,300 balance in loans payable. A minimum cash balance of $13,300 is required. Loans are obtained at the end of any month when a cash shortage occurs Interest is 2% per month based on the beginning of the month loan balance and is paid at each month end ran erow balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and include sales commissions (5% of sales), shipping (2% of sales), office salaries ($4300 per month), and rent ($6.300 per month) Prepare a cash budget for each of the months of April, May, and June (Negetive balances and Loan repayment emounts (if any) should be indiceted with minus sign. Round your final answers to the nearest whole dollar) CASTOR, ING. Cash Budget For April, May, and June June April May $13.300 Beginning cash balance Next> Prev 11 of 12

Explanation / Answer

April May June Beginning cash balance 13,300 13,300 18,222 Cash sales 21,490 28,910 17,710 Collections on account 13,300 9,210 12,390 Total cash available 48,090 51,420 48,322 Cash disbursements: Payments for merchandise 22,800 15,500 15,900 Sales commissions 1,535 2,065 1,265 Shipping 614 826 506 Office salaries 4,300 4,300 4,300 Rent 6,300 6,300 6,300 Interest on bank loan 66 83 0 Total cash disbursements 35,615 29,074 28,271 Preliminary cash balance 12,475 22,346 20,051 Additional loan (loan repayment) 825 -4,125 0 Ending cash balance 13,300 18,221 20,051 Loan balance April May June April May June Loan balance Beginning 3,300 4,125 0 Additional loan (loan repayment) 825 -4,125 0 Loan balance End 4,125 0 0

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