Prepare a cash budget for the month of April from the following information: -Es
ID: 2391127 • Letter: P
Question
Prepare a cash budget for the month of April from the following information:
-Estimated cash balance at the end of March is $250,000
-April's depreciation is $25,000
-Taxes of the year of $50,000 will be paid in December
-Payroll for April will be $45,000
-Insurance cost for the month of April will be $5,000
-Collections of sales are as follows: 50% in the month of the sale, and 25% in each of the next two months
-Receivables balance as of the end of March is $200,000 ($150,000 relating to February, and $50,000 relating to March)
-Sales for the month of April are estimated to be $300,000
-Merchandise purchases are paid as follows: 50% in the month of the purchase and 50% in the next month
-March's purchases were $200,000, and April was $150,000
Explanation / Answer
Cash Budget for the month of April beginning Balancec of cash 250000 Add: Expected receipts Collection from Accounts receivable 325000 (150000+50000/2+300000*50%) Total cash available 575000 Less: Expected disbursement Payment for Purchses 175000 (200000*50%+ 150000*50%) Wages payroll 45000 Insurance paid 5000 Total disbursement 225000 Ending cassh balance of cash 350000