2 points dde en, Inc. has budgeted sales reveruess as follors Credit sales Cash sales Total...

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2 points dde en, Inc. has budgeted sales reveruess as follors Credit sales Cash sales Total sales July $125.000 255.000 $300.000 August S go.000 195.000 $285.000 Past experience indicates that 60% of the credit sales wil be collected in the month of sale and the remairing 40% will be collected in the following month. Purchases of iventory are 9l on credt arvd 0% is paid in the month of purchase and 50% in the month following purchase. Budgeted inventory purchases are. July August 240,000 105,000 Other cash disbursements budgeted: (a) selling and administrative expenses of $48.000 eachh month, (b) dividends of $103.000 will be paid in July, and (c) purchase of equipment in August for $90,000 cash. The company wishes to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on Auqust 1 was $50,000. Assume that borrowed money in this case is for one month structions: 1. Calculate the expected cash receipts and cash payments for the month of August. 2. Prepare a cash budget for the month of August.  2 points dde en, Inc. has budgeted sales reveruess as follors Credit sales Cash sales Total sales July $125.000 255.000 $300.000 August S go.000 195.000 $285.000 Past experience indicates that 60% of the credit sales wil be collected in the month of sale and the remairing 40% will be collected in the following month. Purchases of iventory are 9l on credt arvd 0% is paid in the month of purchase and 50% in the month following purchase. Budgeted inventory purchases are. July August 240,000 105,000 Other cash disbursements budgeted: (a) selling and administrative expenses of $48.000 eachh month, (b) dividends of $103.000 will be paid in July, and (c) purchase of equipment in August for $90,000 cash. The company wishes to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on Auqust 1 was $50,000. Assume that borrowed money in this case is for one month structions: 1. Calculate the expected cash receipts and cash payments for the month of August. 2. Prepare a cash budget for the month of August.

 · Answer

PART A            1.Expected cash receipts (B)=310500       2.Expected cash payments(D)=310500                                   PART B  Cash budget      Particulars   August     A)Opening balance   50000      B)Cash receipts:       1.Cash sales   195000      2.credit sales collected during month   54000        (90000*60%      3.Credit sale for month of july collected in august(40%)   50000     4.Loan taken for maintaing cash balance   11500      Total cash receipts   310500             C)Total cash available   360500      (A+B)        D)Payments        1.purchases(50% current month)   52500        (105000*50%)      2.Purchases 50 % paid in next month(july purchases)   120000        (240000*50%)      3.Selling and administrative Expenses   48000      4.Purchase of equipment(august)   90000     5.Total payments   310500             6.Closing balance   50000      (C-D)                     Ping me if you have any doubts...kindly rate.

2 points dde en, Inc. has budgeted sales reveruess as follors Credit sales Cash sales Total...

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PART A
1.Expected cash receipts (B)=310500
2.Expected cash payments(D)=310500




PART B	Cash budget
	Particulars	August
	A)Opening balance	50000
	B)Cash receipts:
	1.Cash sales	195000
	2.credit sales collected during month	54000
		(90000*60%
	3.Credit sale for month of july collected in august(40%)	50000
	4.Loan taken for maintaing cash balance	11500
	Total cash receipts	310500

	C)Total cash available	360500
	(A+B)
	D)Payments
	1.purchases(50% current month)	52500
		(105000*50%)
	2.Purchases 50 % paid in next month(july purchases)	120000
		(240000*50%)
	3.Selling and administrative Expenses	48000
	4.Purchase of equipment(august)	90000
	5.Total payments	310500

	6.Closing balance	50000
	(C-D)