Grenoble Enterprises had sales of $49,600 in March and $60,000 in April. Forecas

Q: Grenoble Enterprises had sales of $49,600 in March and $60,000 in April. Forecas

Particulars March April May Sales 49,600 60,000 70,300 Cash Sales 8,928 10,800 12,654 Lag 1 Month 29,264 35,400 lag 2 Months 11,408 Other income 2,800 2,800 2,800 Total Cash Receipts 61,328 102,864 132,562 Particulars March April May Sales 49,600 60,000 70,300 Cash Sales 8,928 10,800 12,654 Lag 1 Month 29,264 35,400 lag 2 Months 11,408 Other income 2,800 2,800 2,800 Total Cash Receipts 61,328 102,864 132,562

ID: 2732814 • Letter: G

Question

Grenoble Enterprises had sales of $49,600 in March and $60,000 in April. Forecast sales for May, June, and July arc $70,300, $79,800, and $99.900, respectively. The firm has a cash balance of $4,800 on May 1 and wishes to maintain a minimum cash balance of $4,800. Given the following data, prepare and interpret a cash budget for the months of May, June, and July. The firm makes 18% of sales for cash, 59% arc collected in the next month, and the remaining 23% arc collected in the second month following sale. The firm receives other income of $2,300 per month. The firm's actual or expected purchases, all made for cash, arc $49,800, $70,400, and $80,100 for the months of May through July, respectively. Rent is $2,600 per month. Wages and salaries arc 12% of the previous month's sales. Cash dividends of $2,900 will be paid in June. Payment of principal and interest of $3,500 is due in June. A cash purchase of equipment costing $6,300 is scheduled in July. Taxes of $5,700 arc due in June. Complete the first month of the cash budget for Grenoble Enterprises below: (Round to the nearest dollar. Please input all the values in the table before checking your answers.)

Explanation / Answer

Particulars

March

April

May

Sales

49,600

60,000

70,300

Cash Sales

8,928

10,800

12,654

Lag 1 Month

29,264

35,400

lag 2 Months

11,408

Other income

2,800

Total Cash Receipts

61,328

102,864

132,562