Answer:
Worton Distributing
he ending cash balance on September 30 is estimated to be:
= $87,440
Explanation:
a) Data and Calculations;
August September
Sales $168,000 $201,600 ($168,000 * 1.2)
Purchases $118,000 $138,000
Cash balance September 1 $28,000
Collection of sales on credit: August September
Sales $168,000 $201,600
40% month of sale 67,200 80,640
60% month following 100,800
Total cash collections $181,440
Payment for purchases: August September
Purchases $118,000 $138,000
Payment:
20% month of purchase 23,600 27,600
80% month following 94,400
Total payment for purchases $122,000
Cash budget for September
Beginning balance $28,000
Cash collections 181,440
Available cash $209,440
Cash payments 122,000
Ending balance $87,440
