Question

Maris Brothers Inc. needs a cash disbursement schedule for the months of April, May, and June following information in its preparation.
Sales:
February = $483,000;
March $525,000;
April $542,000;
May $629,000;
June $657,000;
July $667,000
Purchase: Purchases are calculated as 55% of the next month's sales, 10% of purchases are made in cash, 45% of purchase are paid for 1 month after purchase and the remaining 45% of purchases are paid for 2 months after purchase.
Rent: The firm pays rent of $8,030 per month
Wages and salaries: Base wage and salary cost are fixed at $5,800 per month plus a variable cost of 6.8% of the current month's sales.
Taxes: A tax payment of $ $54,100 is due in June
Fixed asset outlays: New equipment costing $74,000 will be bought and paid for in April.
Interest payments: An interest payment of $30,400 is due in June.
Cash dividends: Dividends of $12,500 will be paid in April
Principal repayments and retirements: No principal repayments or retirements are due during these months.

Answer 1

An swer:

June $975,286

April $1,118,052

May $1,076,856

Explanation:

Maris Brothers Inc.Schedule of Projected Cash Disbursements

April May June

Purchases (0.55 x sales)

April $542,000 ×0.55= $298,100

May $629,000×0.55=$345,950

June $657,000×0.55=$361,350

Cash purchases (.10)

April $542,000 ×0.10= $54,200

May $629,000×0.10=$62,900

June $657,000×0.10=$65,700

Payments of A/PLagged 1 month (0.45)

April $542,000 ×0.45= $243,900

May $629,000×0.45=$283,050

June $657,000×0.45=$295,650

Lagged 2 months(0.45)

April $542,000 ×0.45= $243,900

May $629,000×0.45=$283,050

June $657,000×0.45=$295,650

Rent payments

April $8,030

May $8,030

June $8,030

Wages and salaries

April $542,000 ×0.068+5,800= $42,656

May $629,000×0.068+5,800=$48,572

June $657,000×0.068+5,800=$50,476

Tax Payments

June $54,100

Fixed-asset outlays

April $74,000

Interest payments

June $30,400

Cash dividend payments

April $12,500

Total Cash Disbursements

June

($298,100 +$54,200+$243,900+$243,900+$8,030+$42,656+$54,100+$30,400)

=$975,286

April

($345,950+$62,900+$283,050+$283,050+$8,030+$48,572+$74,000+$12,500)

=$1,118,052

May

($361,350+$65,700+$295,650+$295,650+8,030+$50,476)

=$1,076,856