Black Betty Inc.'s sales of bonnets are 10% cash and 90% on credit. Previous collections history...

Transcribed Image Text:

Black Betty Inc.'s sales of bonnets are 10% cash and 90% on credit. Previous collections history shows that credit sales are collected as follows: 25% in the month of sale 70% in the month following sale 5% in the second month following sale In April, sales were $39,000 and May sales were $43,000. Projected sales for June are 4,000 bonnets at $10 each. Projected sales for July are 4,700 bonnets at $11 each. The cash balance at June 1 was $6,000. Betty expects to purchase $23,000 of materials in May and $20,000 of materials in June. Three-quarters of all purchases are paid for in the month of purchase, and the other one-quarter are paid for in the month following the month of purchase. All other fixed expenses are $5,670 per month and are paid in the month of purchase. Prepare the cash budget for the month of June. Black Betty Inc.'s sales of bonnets are 10% cash and 90% on credit. Previous collections history shows that credit sales are collected as follows: 25% in the month of sale 70% in the month following sale 5% in the second month following sale In April, sales were $39,000 and May sales were $43,000. Projected sales for June are 4,000 bonnets at $10 each. Projected sales for July are 4,700 bonnets at $11 each. The cash balance at June 1 was $6,000. Betty expects to purchase $23,000 of materials in May and $20,000 of materials in June. Three-quarters of all purchases are paid for in the month of purchase, and the other one-quarter are paid for in the month following the month of purchase. All other fixed expenses are $5,670 per month and are paid in the month of purchase. Prepare the cash budget for the month of June.

Answer rating: 100% (QA)

To prepare the cash budget for the month of June we need to consider the cash inflows and cash outfl... View the full answer