Wilson\'s Retail Company is planning a cash budget for the next three months. Es
ID: 2461092 • Letter: W
Question
Wilson's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows:
All sales are on credit; 60 percent is collected during the month of sale, and 40 percent is collected during the next month. Cost of goods sold is 80 percent of sales. Payments for merchandise sold are made in the month following the month of sale. Operating expenses total $42,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $30,000.
Prepare monthly cash budgets for February, March, and April.
Use negative signs only with beginning and ending cash balances, when appropriate. Do not use negative signs with disbursement answers.
Month Sales Revenue Month Sales Revenue January $ 300,000 March $ 200,000 February 250,000 April 150,000Explanation / Answer
Wilson's Retail Company
Sales Budgets
Particulars
Jan
Feb
mar
Apr
Sales
$ 300,000
$ 250,000
$ 200,000
$ 150,000
COGS @80%
$ 240,000
$ 200,000
$ 160,000
$ 120,000
Wilson's Retail Company
Cash Budgets
February, March, and April
Particulars
Jan
Feb
mar
Apr
Cash balance, beginning
30,000
168,000
156,000
134,000
Cash receipts:
Current Month Cash sales @ 60%
180,000
150,000
120,000
90,000
Previous month sale collections @ 40%
120,000
100,000
80,000
Total Cash receipts:
180,000
270,000
220,000
170,000
Cash available
210,000
438,000
376,000
304,000
Cash disbursments:
Operating Expenses
42,000
42,000
42,000
42,000
Payment to Merchandise sale
240,000
200,000
160,000
Total disbursements
42,000
282,000
242,000
202,000
Cash balance, ending
168,000
156,000
134,000
102,000
Wilson's Retail Company
Cash Budgets
February, March, and April
Particulars
Feb
Mar
Apr
Cash balance, beginning
168,000
156,000
134,000
Total Cash receipts
270,000
220,000
170,000
Cash available
270,000
220,000
170,000
Total disbursements
282,000
242,000
202,000
Cash balance, ending
156,000
134,000
102,000
Wilson's Retail Company
Sales Budgets
Particulars
Jan
Feb
mar
Apr
Sales
$ 300,000
$ 250,000
$ 200,000
$ 150,000
COGS @80%
$ 240,000
$ 200,000
$ 160,000
$ 120,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.