Insert Page Layout Formulas Data Review View 201820 Required Complete the short-
ID: 2560861 • Letter: I
Question
Insert Page Layout Formulas Data Review View 201820 Required Complete the short-term financing section of the cash budget. E9.28. //Purchases and Cash Budgets LO3 On July 1, MTC Wholesalers had a cash balance of $175,000 and accounts payable of $99,000. Actual sales for May and June, and budgeted sales for July, August, September, and October are: Actual Sales Budgeted Sales Month Month July $ 90,000 June . . . . 160,000 August October..w.... 120,000 All sales are on credit with 75 percent collected during the month of sale, 20 percent collected during the next month, and 5 percent collected during the second month following the month of sale. Cost of goods sold averages 70 percent of sales revenue. Ending inventory is one-half of the next month's predicted cost of sales. The other half of the merchandise is acquired during the month of sale. All pur- chases are paid for in the month after purchase. Operating costs are estimated at $28,000 each month and are paid during the month incurred. Required Prepare purchases and cash budgets for July, August, and September. LO3 E9-29. Cash Receipts The sales budget for Inc. is forecasted as follows 3Explanation / Answer
Purchase and cash Budget for July, August and September is as calculated below:
working:
MTC wholesalers Schedule of expected Cash collections For the quarter ended September 30 Month Particulars July August September Total May sales 7,500 7,500 June sales 32,000 8,000 40,000 July Sales 67,500 18,000 4,500 90,000 August sales 60,000 16,000 76,000 September sales 75,000 75,000 Total collections 107,000 86,000 95,500 288,500 MTC wholesalers Purchase Budget For the quarter ended September 30 Month Particulars July August September October Sales (a) given 90,000 80,000 100,000 120,000 Cost of goods sold b= (70% of sales) 63,000 56,000 70,000 84,000 Planned ending inventory (c ) 50% of next month sales 28,000 35,000 42,000 Beginning inventory (d ) (50% of current month cost of sales) 31,500 28,000 35,000 42,000 Planned Purchase (e)= (b+c-d) 59,500 63,000 77,000 78,000 MTC wholesalers Schedule of expected Cash payments For the quarter ended September 30 Month Particulars July August September Total Beginning Accounts Payable $99,000 $99,000 July purchases $59,500 $59,500 August Purchases $63,000 $63,000 September purchases $0 Total payments (a+b+c+d) $99,000 $59,500 $63,000 $221,500 MTC wholesalers Cash Budget For the quarter ended September 30 Month Particulars July August September Total Opening cash $175,000 $155,000 $153,500 $175,000 Add: Receipts from customers $107,000 $86,000 $95,500 $288,500 Total cash available $282,000 $241,000 $249,000 $463,500 Less: paid to suppliers $99,000 $59,500 $63,000 $221,500 Less: Operating cost $28,000 $28,000 $28,000 $84,000 Total disbusrement $127,000 $87,500 $91,000 $305,500 Cash surplus/Deficit $155,000 $153,500 $158,000 $158,000