Cash Budget Wilson\'s Retail Company is planning a cash budget for the next thre
ID: 2527797 • 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 $44,000 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 Company
Cash Budgets
February, March, and April
Explanation / Answer
Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars January February March April Cash balance, beginning 40,000.00 29,000.00 43,500.00 Total Cash receipts 243,000.00 202,000.00 194,000.00 Cash available 283,000.00 231,000.00 237,500.00 Total disbursements 254,000.00 187,500.00 184,000.00 Cash balance, ending 29,000.00 43,500.00 53,500.00 Note Sales 300,000.00 205,000.00 200,000.00 190,000.00 Collected in same month at 60% 180,000.00 123,000.00 120,000.00 114,000.00 Collected in next month at 40% 120,000.00 82,000.00 80,000.00 Total collections 243,000.00 202,000.00 194,000.00 Cost of goods sold at 70% 210,000.00 143,500.00 140,000.00 133,000.00 Payment for COGS 210,000.00 143,500.00 140,000.00 Payment for operating expenses 44,000.00 44,000.00 44,000.00 44,000.00 Total payment 44,000.00 254,000.00 187,500.00 184,000.00