Cash Budget Wilson\'s Retail Company is planning a cash budget for the next thre
ID: 2416071 • Letter: C
Question
Cash Budget
Wilson's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows:
All sales are on credit; 60 percent is collected during the month of sale, and 40 percent is collected during the next month. Cost of goods sold is 70 percent of sales. Payments for merchandise sold are made in the month following the month of sale. Operating expenses total $41,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $20,000.
Prepare monthly cash budgets for February, March, and April.
Use negative signs only with beginning and ending cash balances, when appropriate. Do not use negative signs with disbursement answers.
Correct
1.00 points out of 1.00
Correct
1.00 points out of 1.00
Incorrect
0.00 points out of 1.00
Correct
1.00 points out of 1.00
Correct
1.00 points out of 1.00
Incorrect
0.00 points out of 1.00
Correct
1.00 points out of 1.00
Correct
1.00 points out of 1.00
Incorrect
0.00 points out of 1.00
Correct
1.00 points out of 1.00
Correct
1.00 points out of 1.00
Incorrect
0.00 points out of 1.00
Correct
1.00 points out of 1.00
Incorrect
0.00 points out of 1.00
Explanation / Answer
Solution.
Preparetion of three month cash budget.
Particular February March April Cash balance bigning 20,000 85,000 115,000 Total Cash receipts 246,000 204,000 194,000 Cash Available 266,000 289,000 309,000 Total Disbursements (181,000) (174,000) (41,000) Cash balance ending 85,000 115,000 268,000