Cash Budget Wilson\'s Retail Company is planning a cash budget for the next thre
ID: 2475873 • 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: Month Sales Revenue Month Sales Revenue January $300,000 March $200,000 February 205,000 April 185,000 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 80 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 $40,000.
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.
Wilson's Retail CompanyCash Budgets
February, March, and April February March April Cash balance, beginning $Answer $Answer $Answer Total Cash receipts Answer Answer Answer Cash available Answer Answer Answer Total disbursements Answer Answer Answer Cash balance, ending $Answer $Answer $Answer
Explanation / Answer
month Jan Feb Mar Apr sales 300000 200000 205000 185000 60% in month of sale 180000 120000 123000 111000 40% in next month 120000 80000 82000 cash available 180000 240000 203000 193000 purchases 240000 160000 164000 148000 100% in next month 240000 160000 164000 operating expenses 41000 41000 41000 41000 cash disbursement 41000 281000 201000 205000 opening cash balance 40000 -1000 1000 net increase 139000 -41000 2000 -12000 closing cash balance -1000 1000 -11000