Answer:
a. $550,000
b. $472,500
c. $12,500
Explanation:
a. Calculation to determine the budgeted cash receipts for December
Budgetted Cash receipts
Cash sales $550,000
Therefore the budgeted cash receipts for December is $550,000 since there is no other receipts which means that the Cash sales of the amount of $550,000 will represent the whole Cash receipts
b. Calculation to determine the budgeted cash disbursements for December
BUDGETED CASH DISBURSEMENTS for December
Cash purchases $412,500
($550,000*75%)
Add Selling and administrative expenses budgeted $60,000
Total Cash disbursement $472,500
Therefore the budgeted cash disbursements for December is $472,500
c. Calculation to determine the budgeted net income for December
BUDGETED NET INCOME FOR DECEMBER
Sales $550,000
Less Cost of goods sold ($442,500)
($300,000+$412,500-$270,000)
Gross margin $107,500
($550,000-$442,500)
Less: Operating Expense
Selling and administrative expense ($60,000)
Depreciation expense ($35,000)
Net income $12,500
($107,500-$60,000-$35,000)
Therefore the budgeted net income for December is $12,500
