Use the following information to prepare a cash budget for Knightsbridge Corpora
ID: 2369855 • Letter: U
Question
Use the following information to prepare a cash budget for Knightsbridge Corporation for the month of June 2012. The template of the cash budget is provided below.
In May, 30-day credit sales were $175,000; 80% of this amount is estimated to be collectible in June.
June sales are estimated to be $425,000; cash sales are usually 25% of total sales. Only 10% of credit sales are collected in the month in which the sale is made.
Total fixed expenses are $60,000 per month, including $26,000 depreciation. Variable expenses are 55% of sales. All expenses requiring payment are paid in cash when incurred.
A $40,000 note payable must be paid on June 30.
As of May 31, the cash balance is $94,000.
KNIGHTSBRIDGECORPORATION
Cash Budget
For the Month of June 2012
Cash balance at beginning of month.
Receipts:
Collections from customers:
May credit sales
June credit sales.
June cash sales
Total cash available..
Disbursements:
Fixed expenses .
Variable expense
Note payable..
Cash balance at the end of the month...
Explanation / Answer
Hi,
Please find the answer as follows:
Collections from Customers
May Credit Sales 140000 June Credit Sales 31875 June Cash Sales 106250 Total Cash Available 372125 Disbursements
Fixed Expenses 34000 Variable Expenses 233750 Notes Payable 40000 Cash balance at the end of month 64375