Answer: Incomplete question.
a. The cash balance on Dec 1 is $47,600.
b. Actual sales for October and November and expected sales for December are as follows:
Oct. Nov. Dec
Cash sales $65k. $70k. $83k
Sales on acc $400k $525k $600k
Explanation:
1. Calculate the expected cash collections for December.
Total cash sales= $85,000
Sales on account= 18% x $400,000 + 60% x $525,000 + 20% x $600,000
= $72,000 + $315,000 + $120,000
= $507,000
Cash collection for Dec.
= $85,000 + 507,000
= $592,000
2. Calculate the expected cash disbursements for merchandise purchases for December.
= purchases in Nov of $194,500 + 30% of $351,000
= 194,500+105,300
= $299,800
3. Prepare a cash budget for December.
Opening cash bal. $ 47,600
Add:
Expected cash coll. $ 592,000
Bank loan( balance). $ 226,300
Less:
Expected cash pmt. $ 299,800
Expected selling exp. $ 430,600
Web server. $104,000
Dividend. $11,500
Balance. $20,000
