Question

Calculating the Cash Budget [LO3] Here are some important figures from the budget of Nashville Nougats, Inc., for the second quarter of 2015:
April May June
Credit Sales $374,400 $349,500 $420,500
Credit purchases $148,900 $169,300 $200,300
Cash purchases:
Wages, taxes and expenses
Interests
Equipment purchases $54,340
12,580
88,800 $70,300
12,580
135,000 $75,170
12,580
0
The company predicts that 5 percent of its credit sales will never be collected, 35 percent of its sales will be collected in the month of the sale, and the remaining 60 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase.
In March 2015, credit sales were $235,000 and credit purchases were $161,300. Using this
information, complete the following cash budget: Please post your calculations (i did my own I need some verification. thank you)
April May June
Beginning Cash Balance $135,000 187,200
Cash receipts 73,700 224,640
Cash collection from credit sales:
Total Cash Available 73,700
208,700
Cash disbursements 155,720
Purchases
Wages, taxes, and expenses 54,340
Interest 12,580
Equipment purchases 88,800
Total cash disbursements 155,720
Ending Cash Balance 52,980

Answer 1

Answer:

Cash Budget

$\left[\begin{array}{cccc}& April& May& June\\ Beginning&135,000&178,820&376,885\\ sales receipts &272,040&346,965&356,875\\ paid to accounts &-161,300&-148,900&-169,300\\ other &-66,920&-82,880&-87,750&\\ Ending&178,820&376,885&564,460\\\end{array}\right]$

Explanation:

To get the collection  we createthe colelctiong budget considering 35% is collected in the current month while 605 from the previosu month

$\left[\begin{array}{ccccc}&April&May&June&Total\\ Sales&374400&349500&420500&934000\\ Current Month&131040&122325&147175&400540\\ Previous&141000&224640&209700&575340&\\Total&272040&346965&356875&975880\\\end{array}\right]$

The paid to account is based in the previos month.

Then we have to add the equipment purchase with the wages, taxes and expenses to get the other cahs outlay.

We then calcualte and determiante the ending amount which, is carried and transformed into beginning of the next month