The following information pertains to Amigo Corporation: Sales $30,000 34,000 38

Question

The following information pertains to Amigo Corporation: Sales $30,000 34,000 38,000 42,000 48,000 60,000 Purchases Month July August September October November December $10,000 12,000 14,000 16,000 18,000 20,000 Cash is collected from customers in the following manner: 45% Month of sale Month following sale Two months following sale 40% 10% 5% Amount uncollectible 50% of purchases are paid for in cash in the month of purchase, and the other 50% is paid the following month. Required: Complete the cash budget for the 4th quarter October November Beginning Balance:$30,000 2 k) ? Cash Collections from: August September October November December

Explanation / Answer

Answer =1 CASH BUDGET FOR SALES July August September October November December Budgeted Sales $            30,000 $            34,000 $               38,000 $               42,000 $                48,000 $                 60,000 Cash Collected in the month of Sale 45% $            13,500 $            15,300 $               17,100 $               18,900 $                21,600 $                 27,000 40% collected in the next month $            12,000 $               13,600 $               15,200 $                16,800 $                 19,200 10% collected in the next 2 month $                 3,000 $                 3,400 $                  3,800 $                   4,200 Amount uncollectable is 5% $                        -   $                         -   $                          -   Total Collection of the months $               37,500 $                42,200 $                 50,400 CASH BUDGET FOR PURCHASE July August September October November December Purhases $            10,000 $            12,000 $               14,000 $               16,000 $                18,000 $                 20,000 Payments are made as below 50% of purchase in the month of purhcase $               5,000 $               6,000 $                 7,000 $                 8,000 $                  9,000 $                 10,000 Next 50% is ne the next month of purchase $               5,000 $                 6,000 $                 7,000 $                  8,000 $                   9,000 $               15,000 $                17,000 $                 19,000 CASH BUDGET FOR THE MONTH OF OCTOBER AND NOVEMBER AND DECEMBER OCTOBER NOVEMBER DECEMBER Opening Balance Opening Balance $            30,000 $            10,000 $               27,700 Cash Collection (From Cash Budegeted Sales) $            37,500 $            42,200 $               50,400 Total Cash Available $            67,500 $            52,200 $               78,100 Less: Cash Payment (From the Purhase Cash Budget) $            15,000 $            17,000 $               19,000 Closing Balance $            52,500 $            35,200 $               59,100 Minimum Balance Required $            10,000 $            10,000 $               10,000 Payment of Loan (A) $            42,500 $               7,500 $                        -   Net Cash Balance after loan Payment $            10,000 $            27,700 $               59,100 Opening Balance in Loan (B) $            50,000 $               7,500 Payment of Loan $            42,500 $               7,500 Balance in Loan After Excess payment available $               7,500 $                      -

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