Answer and Explanation:
The Preparation of the cash budget for June is prepared below:-
<u>Cash Budget</u>
<u>For the month of June</u>
<u>Particulars Amount</u>
Begining cash $736
Add:
Collections:
Cash sales $18,600
Credit sales
Current month $21,600 ($54,000 × 30%)
May credit $10,500 ($35,000 × 30%)
Credit sales of April $5,896 (explained in note 1)
Total cash available $57,332
Less: Disbursement
Purchase of inventory
Current month $9,293 (explained in note 2)
($46,464 × 20%)
Prior month $27,136 (explained in note 2)
($33,920 × 80%)
Salary $11,750 (explained in note 3)
Rent $4,100
Taxes $6,780
Need's total -$1,727
Excess for cash available
over needs
Note:-
1. Amount which is received in June is
= $28,900 × 20%
= $5,780
Late fees = $5,780 × 2%
= $116
June receipts is
= $5,780 + $116
= $5,896
2. Purchase of inventory is
= $53,000 × 64%
= $33,920
Total sales = Cash + Credit sales
= $72,600
Puchase of inventory = $72,600 × 64%
= $46,464
3. Entirely amount is taken of salaries and wages if it paid or not.
