PROF SocratesClipboard Office Supply's sales are 50% cash and 50% credit. Credit sales are collected in the month after the sale.Inventory purchases are paid 40% in the month of purchase and 60%
the following month. Salaries and sales commissions are paid half in the month earned and half the next month. Income tax is paid at the end of the year.
The April 30, 2011, balance sheet showed the following balances:
Cash. . . . . . . . . . . . . . . . . . . . . . . . . | $20,000 |
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Accounts Payable. . . . . . . . . . . . . . . | 48,000 |
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Salaries and commissions payable. . 2,950
DATA TABLE Clipboard Office Supply Operating Expenses Budget For May and June 2011 . |
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May | June | |||
Beginning Inventory | $14,000 | $21,600 | ||
+ Purchases | 24,500 | 25,100 | ||
=Cost of goods available | 38,500 | 46,700 | ||
-Ending inventory | (21,600) | (21,500) | ||
=Cost of goods sold | $16,900 | $25,200 | ||
DATA TABLE
Clipboard Office Supply |
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Operating Expenses Budget |
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For May and June 2011 |
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| May | June |
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Salaries and commissions | $6,000 | $6,000 | ||||||||||||||||||||||||||||
Rent expense | 2,800 | 2,800 | ||||||||||||||||||||||||||||
Depreciation expense | 500 | 500 | ||||||||||||||||||||||||||||
Insurance expense | 200 | 200 | ||||||||||||||||||||||||||||
Total operating expenses | $9,500 | $9,500 | ||||||||||||||||||||||||||||
DATA TABLE Clipboard Office Supply |
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Budgeted Income Statements |
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For May and June 2011
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Requirements
1. | Prepare schedules of (a) budgeted cash collections, (b) budgeted cash payments for purchases, and (c) budgeted cash payments for operating expenses. Show amounts for each month and totals for May and June. Round your computations to the nearest dollar. Sales in April were $48,000. |
2. | Prepare a cash budget. If no financing activity took place, what is the budgeted cash balance on June 30, 2011?
(a)Prepare a schedule of budgeted cash collections for May and June.
Clipboard Office Supply Budgeted Cash collections from Customers For May and June 2011 |
May June Total
Cash sales
Collections of last month’s credit sales
Total cash collections
(b.) Prepare a schedule of budgeted cash payments for purchases for May and June.
Clipboard Office Supply
Budgeted Cash Collections from Customers
For May and June 2011
May June Total
60% of last month’s purchases of inventory
40% of this month’s purchases of inventory
Total payments for purchases
(c) Prepare a schedule of budgeted cash payments for operating expenses for May and June.
Clipboard Office Supply
Budgeted Cash Payments for operating Expenses
For May and June 2011
May June Total
Salaries and commission expense:
50% of last month’s expenses
50% of this month’s expenses
Rent expense
Total payments for operating expenses
Requirement 2.
Prepare the cash budget for May and June. If no financing activity took place, what is the budgeted cash balance on June 30, 2011? (Round all amounts to the nearest dollar.)
Clipboard Office Supply
Cash Budgeted
For May and June 2011
May June
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Cash payments:
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9 years ago
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cash_budget_answer.docx
