1. Prepare the cash budget of the Koutouzov Company for the first six months of
ID: 2539952 • Letter: 1
Question
1. Prepare the cash budget of the Koutouzov Company for the first six months of XXX1 on the basis of the following estimates:
Actual and estimated sales are:
Additional Info:
- Sales are 30 percent for cash and 70 percent for credit; 50 percent of credit sales are collected in the month after sales and the remaining balance collected in the second month after sales.
- Purchases of merchandise are 80 percent of sales and made one month in advance of sales date to allow for delivery. Purchases are paid in full in the month following the purchases.
- Wages and salaries are $1,296 a month; interest on $6,480 of 6 percent notes payable is paid quarterly; the company has a cash balance of $2,333 as of December 31, XXX0, and a minimum cash balance of $1,080 is to be maintained throughout the budget period.
I would really appreciate help with this! I have a lot of trouble with these problems, thanks!
November XXX0 December XXX0 January XXx1 February XXX1 8,640 March XXX1 7,776 April XXX1 6,480 May XXX1 5,184 June XXX1 3,456 4,320 6,480 7,776 8,640 July XXX1Explanation / Answer
Answer: Cash Budget for the months for six months
sales collected 35% in the next month {(1)*35%}
(35% = 50% of 70%)
sl.no Particulars nov dec jan feb march april may june july 1 sales (given) 8640 7776 6480 5184 3456 4320 6480 7776 8640 2 sales collected 30% in same month {(1)*30%} 2592 2332.8 1944 1555.2 1036.8 1296 1944 2332.8 2592 3.sales collected 35% in the next month {(1)*35%}
(35% = 50% of 70%)
3024 2721.6 2268 1814.4 1209.6 1512 2268 2721.6 4. sales collected in next 2nd month {(1)*35%} 3024 2721.6 2268 1814.4 1209.6 1512 2268 5 total sales collections (2+3+4) 7689.6 6544.8 5119.2 4319.6 4665.6 6112.8 6 opening cash balance 2333 8726.6 9838.2 10799.4 10367 8552.6 7 total cash collected (5+6) 10022.6 15271.4 14957.4 15119 15032.6 14665.4 8 purchases to be made of 80% of next month sales in advance 4147.2 2764.8 3456 5184 6220 6912 9 payment for purchases made in next month 4147.2 2764.8 3456 5184 6220 10 wages and salaries 1296 1296 1296 1296 1296 1296 11 interest-made quarterly 97.2 97.2 12 total payments made (9+10+11) 1296 5433.2 4158 4752 6480 7613.2 13. closing cash balance (7- 12) 8726.6 9838.2 10799.4 10367 8552.6 7052.4Related Questions
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